Trading under the African Continental Free Trade Area (AfCFTA) begins today January 1, 2021, with a market of 1.2 billion people and a combined Gross Domestic Product (GDP) of $2.5 trillion would usher in a new era of development.
So far more than 30 countries of the 54 who have signed the AfCFTA agreement and have thus far ratified it and are full state parties to the agreement.
The AfCFTA should be made to work as it is the continent’s only path to sustainable development, David Luke, Coordinator of the Economic Commission for Africa’s (ECA) African Trade Policy Centre (ATPC) has said in a webinar.
He said all societies only developed when their productive capacities, productivity and competitiveness were expanded, driven by trade, and Africa could not be an exception.
“Let’s not underestimate the importance of this AfCFTA initiative,” Mr. Luke said, adding that “There’s no plan B, we have to make this AfCFTA work”.
Revenues from trade were in multiples of receipts from sources like investments, remittances, foreign direct investment and foreign aid, he said.
The AfCFTA aims to create the world’s largest free trade area with the potential that brings together more than 1.2 billion people with a GDP of over $2.5 trillion.
It has the potential to generate a range of benefits through economy of scale, trade creation, structural transformation, productive employment, and poverty reduction.
The agreement entered into force on 30 May 2019 after the treaty was ratified by 22 countries – the minimum number required by the treaty. To date, 34 countries have submitted their instrument of ratification to the African Union Commission (AUC).
Trading is due to commence on January 1st, next year after the COVID-19 pandemic caused it to be postponed from July 1st, this year.
Yinka Adeyemi, ATPC Senior Adviser appealed to journalists not to allow external forces to take control of the AfCFTA narrative by amplifying disputes that would arise from the agreement rather than emphasising the opportunities the agreement would bring.
“AfCFTA is our own story to tell; we must not allow others to take control of the narrative,” he said.
The ATPC, the ECA has been working with the AUC and member states to deepen Africa’s trade integration and effectively implement the agreement through policy advocacy and national strategy development.
The ECA also works closely with the International Trade Centre (ITC), the UN Conference on Trade and Development (UNCTAD), and a selection of independent trade experts with the financial support of the European Union (EU) to support its implementation across the continent.
The AfCFTA is anchored on the philosophical and intellectual foundation of a Pan-Africanism and a good sense of advancing the imperatives.
Africa is on the cusp of a historic milestone, which started when the AfCFTA was signed in Kigali, Rwanda in March 2018.
Today, 41 countries/customs unions have submitted their tariff offers, including the EAC and ECOWAS who submitted their offers in the last few days. This positions the AfCFTA for a truly commercially meaningful start of trading on January 1.
Glowing tribute must be paid to the unwavering leadership and commitment of President Mahamadou Issoufou, the Champion and Leader of the AfCFTA.
Africa continues to be trapped in a colonial economic model, which requires that we aggressively implement the AfCFTA as one of the tools for effecting a fundamental structural transformation of Africa’s economy and placing Africa on a path of long term industrial development.
Now is the time to take action to dismantle this colonial economic model by accelerating our industrial development objectives.
For the AfCFTA to be inclusive and to ensure shared growth across the continent; women, young Africans and SMEs have to be at the heart of its implementation.
AfCFTA is partnering with the UNDP to ensure that the Agreement contributes to the achievement of Sustainable Development Goals, Agenda 2030. The Afro-Champions deployment of a digitally enabled platforms to connect SMEs, women in trade and young entrepreneurs to new markets on the African continent, is another plus.
In revitalising Africa’s economy, particularly the services sector – AVRIVA – the Africa CDC Trusted Travel Initiative is critical. Indisputably, Afreximbank has been a strong strategic partner to the AfCFTA.
A Pan-African Payments and Settlement Platform has been launched in 2019 in Niamey, with the additional development of an Adjustment Facility, which are both instruments that would support the implementation of the AfCFTA puts Africa in readiness to roll.
Again, fruitful discussions held with Zenith Bank about a trade portal and Standard Bank about the establishment of a US$1 billion Trade Finance Facility, which would be aimed at expanding partnerships among SMEs primarily have been assured.
The exploration of the possibility of this Trade Finance Facility being jointly underwritten by governments, African banks and African multilateral development institutions. As much progress as was made, integrating 55 markets would be difficult, it is a daunting task but collective Africa will succeed as Ghana hosts the AfCFTA Secretariat.