Opinions & Features May 24, 2019 at 09:00 am

These four factors hinder the long-cherished dream of a united Africa

Fatiatu Inusah | Contributor

Fatiatu Inusah May 24, 2019 at 09:00 am

May 24, 2019 at 09:00 am | Opinions & Features

The African Heads of States and Governments pose during African Union (AU) Summit for the agreement to establish the African Continental Free Trade Area in Kigali, Rwanda, on March 21, 2018. / AFP PHOTO / STR

Trade barriers

It seems the continent enjoys trading with countries outside the continent than they do with their neighbours. Trading among Sub-Saharan countries is reportedly very low. They, however, record higher trading activities with countries outside Africa.

Intra-regional trade is estimated at 10% within the region, as against 40% and 60% recorded for trade with North America and Europe respectively. Among the reasons for recording such low trading activities on the continent include burdensome customs procedures, insufficient funds, excessive document requirement and poor infrastructure.

It would be advantageous for African countries to implement trade facilitation measures which would ease the movement of goods across borders. A measure which is yet to be implemented is the African Continental Free Trade Area (AfCFTA) Agreement.

The AfCFTA is expected to enter into force by July, a year after 44 countries first signed the consolidated text of the Agreement in the Rwandan capital Kigali to enable the long-awaited economic integration and movement of goods and persons across member states.

After it comes into force, the AfCFTA will create a single continental market for goods and services; enhance free movement of business persons and investments; enhance competitiveness at the industry and enterprise level through exploiting opportunities for full-scale production.

It will also enforce the establishment of the Continental Customs Union and the African customs union, expedite the regional and continental integration processes and exploit opportunities for scale production, continental market access and better reallocation of resources.

With the commitment of all countries, the AfCFTA could bring together the 1.2 billion African population with a combined gross domestic product (GDP) of more than $3.4 trillion to remove tariffs on 90 per cent of goods, with 10 per cent of “sensitive items” to be phased in later.

As at April 2019, only 52 of the 55 African states have signed the text with the exception of Nigeria, Eritrea and Benin who are still on the fence due to diverse reasons including pressures from business leaders and labour unions who believe the agreement could affect their economies.

Out of the 52 countries, only 22 have submitted their instruments of ratification starting with Ghana and Kenya in May 2018.

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