Home Diplomatic Suite Africa Continental Free Trade Agreement comes into force today

Africa Continental Free Trade Agreement comes into force today

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 (Photo credit should read STR/AFP/Getty Images)


Consistent with the provisions of the Treaty of the Africa Continental Free Trade Agreement, AfCFTA, law that the instrument comes into force 30 days after 22 countries had deposited their instrument of ratification, the law would take effect today, May 30.

The law so far has been signed by 52 countries including Nigeria that hasn’t however ratified the multilateral treaty which is already reputed to be the largest trade treaty made in the past 25 years.

However, among the countries that have dropped their instrument of ratification, Saharawi Arab Republic was the last that filed on April 29, 2019, and with another 23 that have complied with the internal domestication of the treaty and the 52 already signed, the law takes effect.

It has the objective of encouraging trade and free movement with the African continent where a mere paltry 17 percent of made in Africa goods reach each other as against 59 percent in Asia and 60 percent in Europe. That implies that 83 percent of goods in African  countries are from outside the continent as imported commodities, and people’s movement within Africa are also not better with transportation restrictions, including visa requirements and the dearth of aviation linkages. Most times, a traveller to an African country from another African country first flies to Europe to connect the other African countries by air.

In exploring the benefits of the AfCFTA, Peter Fabricius wrote that “The ambitious African Continental Free Trade Agreement (AfCFTA) which technically enters into force on 30 May could be the game changer for Africa’s hitherto lackluster economy. Driven by Rwandan President Paul Kagame, the process of reaching this point may well have broken all African records. African Union member states launched negotiations to create this huge market of 1.2 billion people with a GDP of over US$3.4 trillion in only March last year.

Jakkie Cilliers, head of African Futures and Innovation at the Institute for Security Studies, calculates that the AfCFTA, if properly implemented, would boost Africa’s economic growth and reduce extreme poverty more than any other single factor in the long term.

In a forthcoming book on Africa’s future, Cilliers reports on the results of forecasts done using the International Futures software on the likely impacts of 11 major transitions: social grants, rejuvenated education, peace, a fourth wave of democracy, improved health, external support, a demographic dividend (a timely bulge in the size of the working-age population), an upsurge in local manufacturing, an African agricultural revolution, leapfrogging outdated technologies – and the AfCFTA.

Regarding the objectives, another agency source explained that: Trade within Africa is in a dire state. A mere 17% of African countries’ exports go to other African countries—compare that with intra-regional trade levels of 59% in Asia and 69% in Europe. That means Africa doesn’t feature much in the way of cross-border value chains.

Why? There’s currently a mess of fragmented tariffs and trade regulations. As Africa’s richest man, the Nigerian billionaire Aliko Dangote, recently complained, a Dangote Industries cement factory that’s a mere 25 miles from the border with Benin finds it difficult to sell its wares into that country, because of Benin’s decision to import Chinese cement instead.

Once the AfCFTA comes into effect, the signatories will need to drop 90% of their tariffs for imports from other African states. According to the United Nations, this could boost intra-African trade by 52.3%. And once countries drop their remaining tariffs, which they will be allowed to maintain for a decade in order to protect key industries, the U.N. says intra-African trade will double.”

ACMC with additional agency reports


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