FREE TRADE PACT TO PROPEL AFRICA TAKE OFF
November 13, 2019
The Africa continental free trade area (AfCTA) pact was created with an aim to create a single continental market for goods and services, with free movement of business persons and investments. The AfCTA aims to tackle non-tariff barriers such as long delays at border points that restrict trade between African countries which will in turn allow free movement of goods and services.
The treaty was signed by 44 countries out of the 55 members of the African union in Kigali, Rwanda in March this year . All member states including those that are yet to sign must ratify the CFTA agreement at national level by September this year.
Kenya and Ghana have made history as the first countries to ratify Continental Free Trade Area agreement. This brings the minimum number of countries required to approve the deal to 20 with Niger and Rwanda being close to formalize the deal. The remaining countries have until September this year to approve the pact.
Trade between African countries currently stands at only 12 per cent with the trade deal expected to increase trade to 52%. This agreement will bring together 1.2 billion people with a combined gross domestic product (GDP) of more than $2 trillion. Over 75 per cent of Africa’s exports outside the continent were done from 2012 to 2014.
The African continent has diverse membership from, those that are large and well developed to those that are small and less developed. This trade deal hopes to give uniform advantage to all countries by having policies that well matched for all. For example, although landlocked countries incur a lot of freight and transport costs, the AfCFTA has included provisions on trade facilitation, transit and customs cooperation.
More needs to be done
The trade pact however needs to solve challenges such as dismantling barriers and reducing costs. The United Nations Conference on Trade and Development (UNCTAD) recommends to governments to involve non-state actors such as the private sector, civil society and the academia in its implementation. If implemented well, the deal will indeed make Africa the future.