Africa’s free trade area worth $3 trillion now comes into force
Thursday May 30 2019
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
Africa's planned free trade area has come into force allowing member countries to remove tariffs from up to 90 per cent of the 200 items traded on the continent.
The African Continental Free Trade Area (AfCFTA) came into force on May 30, in line with the pact launched by the African Union Summit in Kigali in March 2018.
The agreement binds member countries to operationalise the free trade area 30 days from the day the 22nd country ratified the agreement.
Sierra Leone and the Saharawi Republic (the 22nd) ratified the agreement on April 29.
Cabinet Secretary in Kenya’s Ministry of East African Community Affairs Adan Mohamed said the continental market is now open although countries still have to deal with operational issues including standards of products to be traded before they start reaping the benefits of this expanded market.
“The African continental free trade area has come into force, effectively meaning that the necessary countries have ratified it. That is basically what has happened but I think it will take a bit of time before people realise this because there are still a lot of operational issues such as the standards of the goods and which type of goods are to be traded,” Mr Mohamed told The EastAfrican.
“The governments have already done their part and now it is the people to make it happen. The market is now one big market, this is a dream come true,” he added.
The African Union and African ministers of trade are expected to finalise work on supporting instruments to facilitate the operational phase of the agreement during an Extraordinary Heads of State and Government Summit on July 7.
The AfCFTA seeks to bring together all 55 member states of the AU covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product of more than $3.4 trillion.
By April 30, this year, 52 countries out of the 55 had signed the agreement and only 22 had ratified it.
Nigeria is one of the three countries that are yet to sign the agreement that seeks to boost intra-African trade, stimulate investment and innovation. The others are Benin and Eritrea.
Nigeria, Africa’s largest and most populous economy, should sign after President Muhammadu Buhari approves an impact-assessment report he asked for.
“I think the president has a sense of urgency about this because when he asked us to conduct an impact assessment study and we were given just three months to finish everything; we have done so,” said Okechukwu Enelamah, Nigeria’s Minister of Industry, Trade and Investment.
The AfCFTA’s main objective is to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union.