African Continental Free Trade Area: Time for Action
Africa Day 2023 will be observed this Thursday May 25, with focus on the progress made in the implementation of the African Continental Free Trade agreement.
Activities this year unfolded under the theme “Acceleration of AfCFTA implementation.”
Africa Day is intended to celebrate and acknowledge the successes of the African Union from its creation to the fight against colonialism and apartheid, as well as the progress that Africa has made while reflecting upon the common challenges that the continent faces in a global environment.
The African Continental Free Trade Area AfCFTA is a free trade area encompassing most of Africa.
It was established in 2018 by the African Continental Free Trade Agreement, which has 43 parties and another 11 signatories, making it the largest free-trade area by number of member states, after the World Trade Organization, and the largest in population and geographic size, spanning 1.3 billion people across the world’s second largest continent.
The Implementation of the African Continental Free Trade Area Agreement
The different committees voted for the African Continental Free Trade Area have been working to move the agreement from talks to action.
The AfCFTA is set to be implemented in phases, and some of the future phases still under negotiation.
– Phase I covers trade in goods and trade in services.
– Phase II covers intellectual property rights, investment and competition policy.
– Phase III covers E-Commerce.
The 12th Extraordinary summit of the African Union which was held in Niamey on July 7, 2019 was an occasion for Africa, as it saw the successful launching of the operational phase of the African Continental Free Trade Area.
The AfCFTA agreement was adopted and opened for signature on March 21, 2018 in Kigali and entered into force on May 30, 2019.
The launch ceremony included “a roll call of honour” during which the 27 countries that had ratified the instruments of the AfCFTA as at 7th July 2019 were announced, and the 28 countries which had signed but not yet ratified were also announced with only one member state, Eritrea, yet to sign.
According to the World Bank, the deal creates a continent-wide market embracing 54 countries with 1.3 billion people and a combined GDP of US$3.4 trillion.
Its first phase, which took effect in January 2021, would gradually eliminate tariffs on 90 percent of goods and reduce barriers to trade in services. That could raise income by 7 percent, or $450 billion, by 2035, reducing the number of people living in extreme poverty by 40 million, to 277 million, according to a World Bank report published in 2020.
The report, “Making the Most of the African Continental Free Trade Area: Leveraging Trade and Foreign Direct Investment to Boost Growth and Poverty Reduction,” is intended to be a guide for policy makers charged with carrying out the agreement.
To maximize its benefits, the first step will be to conclude planned negotiations on investment, e-commerce, and intellectual property.
The report also recommends building grass-roots support for and understanding of the agreement, simplifying red tape to encourage investment, and pairing the deal with a “complementary agenda” that includes training and advice for national trade ministries charged with supervising compliance and administration.
Bruno Ndonwie Funwie