Free trade in Africa under iconic AfCFTA to start in January 2021

Abu Mubarik Nov 19, 2020 at 01:30pm

November 19, 2020 at 01:30 pm | Money Moves, News

Abu Mubarik

Abu Mubarik

November 19, 2020 at 01:30 pm | Money Moves, News

AfCFTA Headquarters in Accra. Photo Credit: Modern Ghana

The African Continental Free Trade Agreement (AfCTA) will begin operations in January 2021, although trading was originally planned for July 1, 2020, but was delayed due to the coronavirus pandemic. According to the BBC, negotiations resumed this week between countries to deal with final sticking points around rules of origin and market access.

The Agreement establishing the AfCFTA was signed in March 2018 in Kigali Rwanda, following the conclusion of the main legal texts. 54 Member States of the African Union have signed, and 30 countries have deposited their instruments of ratification with the Chairperson of the African Union Commission.

The main objectives of the AfCFTA are to create a single market for goods and services, facilitate the movement of persons, promote industrial development and sustainable and inclusive socio-economic growth, and resolve the issue of multiple memberships, under agenda 2063. It lays a foundation for the establishment, in the future, of a Continental Common Market.

The implementation of the agreement suffered an initial setback when the continent’s biggest economy, Nigeria, delayed signing the agreement. Analysts were of the view that had Nigeria failed to rectify the deal, the Pan African free trade zone would have been stillborn.

Regional integration in Africa has been hampered by the lack of political will exhibited by member states, political instability, the multiplicity of memberships to Regional Economic Communities (RECs) and inadequate funding among others.

According to the African Union (AU), intra-African trade is estimated to increase by 52.3 percent (US$34.6 billion) under the AfCFTA, compared to the current arrangement without AfCFTA. The free trade area will cover a market of 1.2 billion people and a gross domestic product (GDP) of US$2.5 trillion, across 54 member states. The continental trading bloc is expected to be the world’s largest free trade area since the formation of the World Trade Organization (WTO) in terms of the number of participating states.

In August, Ghana handed over the Secretariat of AfCFTA to the Chairperson of the African Union Commission, Moussa Faki Mahamat, at a ceremony in Accra. President Nana Akufo-Addo, who supervised the handing over ceremony, also announced at the event the provision of a residential accommodation to serve as the official residence of the Secretary-General of the AfCFTA.

In a statement, he said Africa’s prosperity depends largely on intra-African trade. “Increase in trade is the surest way to deepen regional integration in Africa. “We are now the world’s largest free trade area since the formation of the World Trade Organization, and we must make it count.”

Most viewed

Conversations

Must Read