The Africa Continental Free Trade Agreement

The world`s largest trade area for participating countries since the creation of the World Trade Organization. What complicates matters further is that Africa was already divided into eight separate free trade zones and/or union unions, with different regulations. [Note 1] These regional bodies will continue to exist; The African Continental Free Trade Agreement aims firstly to remove barriers to trade between the various pillars of the African Economic Community and, finally, to use these regional organizations as building blocks of the ultimate goal of an African-wide customs union. [21] [30] [31] [32] In order to facilitate the implementation of the free trade area, the following institutions were created. As a result of the Phase II negotiations, additional committees may be set up through minutes. [38] So far, it is true that only five East African countries have submitted their ratification of the AfCFTA. However, what matters is not the number of countries, but the fact that a regional bloc of contiguous countries, representing about three-quarters of regional GDP, is growing. From 1 January 2021, Djibouti, Ethiopia, Kenya, Rwanda and Uganda will all begin with a reduction in their tariffs – starting with a linear reduction to 90% of tariffs – which will result in the abolition of tariffs on intra-regional imports over a five-year period (10 years for countries considered by the United Nations as the “least developed countries”); By the standards of regional trade agreements, this pace of liberalization will be quite rapid. After the Kigali summit, more signatures were added for the AfCFTA. At the African Union summit in Nouakchott on 1 July 2018, five other nations, including South Africa, joined the agreement. Kenya and Ghana were the first nations to ratify the agreement and file their ratifications on 10 May 2018. [2] Of the signatories, 22 had to ratify the agreement in order for it to enter into force, and it happened on 29 April 2019, when Sierra Leone and the Arab Democratic Republic of the Sahara ratified the agreement.

[7] As a result, the agreement came into force 30 days later on 30 May 2019; At that time, only Benin, Nigeria and Eritrea had not signed. Outstanding issues, such as trade agreements and rules of origin, are still being negotiated. [when?] The World Bank report, The African Continental Free Trade Area: Economic and Distributional Effects, aims to help policymakers implement policies that can maximize the potential benefits of the agreement while minimizing risks. Creating a continental market requires resolute efforts to reduce all business costs. Governments also need to develop strategies to increase the willingness of their workforce to take advantage of new opportunities. He said Africa`s prosperity depends largely on intra-African trade. “Increased trade is the safest way to deepen regional integration in Africa. Given that the Nigerian government continued to consult with local business groups in the second half of 2018, one of the main concerns was whether the agreement adequately prevented anti-competitive practices such as dumping.

[59] At the close of 2018, former President Olusegun Obasanjo said the delay was “regrettable” and stressed the lack of trade in goods between African countries, the difficulties in getting from one African country to another, and the colonial legacy of these restrictions on Africa`s growth. [60] The government steering committee responsible for the consultation process is expected to release its report on the agreement in January 2019. [61] Indeed, Africa will benefit even more from trade diversification and value chain growth than through a single free trade agreement.