On May 30, 2019, the African Continental Free Trade Agreement came into force, opening the door for the Continental Free Trade Area (AfCFTA). The AfCFTA will create a single continental market for goods and services, with free movement of business persons and investments, and it is expected to speed up the establishment of the Continental Customs Union and the African customs union.
The AfCFTA it is expected to expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation regimes and instruments across RECs and across Africa in general, among others.
The decision for the AfCFTA was adopted at the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in Addis Ababa, Ethiopia in January 2012. It was agreed that the deal should be reached by an indicative date of 2017. The Summit also endorsed the Action Plan on Boosting Intra-Africa Trade (BIAT) which identifies seven clusters: trade policy, trade facilitation, productive capacity, trade related infrastructure, trade finance, trade information, and factor market integration.
During a meeting with the European Union delegation in Addis Ababa last week, Dr. Vera Songwe, the Executive Secretary of the Economic Commission for Africa (ECA), said: “One of the most important impacts of AfCFTA is that it opens the door for funding Africa’s infrastructural needs, whether its railways, highways or telecommunications, or energy. In turn emergence of adequate infrastructure will create value chains that can strengthen old markets and lead to new markets and more jobs.”
The discussion centered on trade, investment, economic growth and migration.
Infrastructure requirements in the sub-Saharan market are estimated at $94 billion annually, according to the World Bank.
In his remarks, the President of the European Economic and Social Committee (EU-EESC), Luca Jahier said the EU Economic and Social Committee takes Africa as a serious trade partner, particularly in the contexts of both post-Lome/Cotonou Agreements, where a great deal of work has been undertaken by the Committee on the Africa, Caribbean and Pacific Groups.
“The EU-EESC recognized an Africa that was going through a renaissance. This was evidenced by the new incoming EU Commission which is going to put Africa as its priority,” he added.
With a population of 1.2 billion, Africa could generate a GDP of $4.5 trillion with the AfCFTA, and the Area will be the largest in the world, with potential to increase job creation.
Dr. Songwe also believes that the AfCFTA is a promising stimulant for economic growth in Africa, infrastructure investments as well as in helping address the economic causes for African migration to Europe, among others, adding that the number of African migrants going to Europe was much less than what was being reported internationally.
The AfCFTA will be launched on July 7, 2019 in Niamey, Niger.
Of the 55 member countries of the African Union Commission (AUC), 52 have signed the Agreement, the other three yet to sign are Nigeria, Benin and Eritrea, 24 countries have ratified the Agreement and have deposited the instruments with the AUC, and 20 countries are in the process of ratifying the Agreement. But with 24 member countries depositing their instruments of ratification with the AUC, exceeding the threshold of 22, the Agreement comes into effect.
By Emmanuel K. Dogbevi
Copyright ©2019 by Creative Imaginations Publicity
All rights reserved. This article or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in reviews.