AfCFTA: Spotlighting The Emergence Of One African Market

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By Joshua Olomu

The African Continental Free Trade Area (AfCFTA), with its secretariat in Accra Ghana, is a free trade area with 54 of the 55 African Union (AU) nations as participating members.

It was created by the African Continental Free Trade Agreement brokered by the AU, and was signed by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018.

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The free-trade area is reputed to be the largest in the world in terms of the number of participating countries since the formation of the World Trade Organisation.

The AfCFTA initially seeks to reduce trade barriers between the different pillars of the African Economic Community, and eventually use these regional organisations as building blocks for the ultimate goal of an Africa-wide customs union. adsbygoogle || []).push({});

The free -trade area was expected to come into effect after 22 of the signing countries ratified the agreement which occurred in April 2019 when The Gambia became the 22nd country to ratify it.

It came into force on May 30, 2019, as the required 22 countries threshold had deposited their instruments of ratification.

As of August this year, there are 54 signatories, of which at least 30 have ratified and 28 have deposited their instruments of ratification.

On August 18, 2020, AfCFTA Secretariat was commissioned and handed over to the AU by the President of Ghana His Excellency Nana  Akuffo Addo.

The Secretariat, an autonomous body within the AU system, will be responsible for coordinating the implementation of the agreement, with Mr. Wamkele  Mene, a South African, as its first Secretary-General.

The Secretary General is expected to provide leadership and technical support for AfCFTA Secretariat, management of its day-to-day activities and the implementation of the AfCFTA Agreement, among other functions.

Although the Secretariat has independent legal personality, it is expected to work closely with the AU Commission and receive its budget from the AU.

The general objectives of the AfCFTA agreement  is to create a single market for goods and services, deepens the economic integration of the Africa continent and  establish a liberalised market through multiple rounds of negotiations.

Among other objectives, the free trade area is expected to pave the way for creating a customs union and grow intra-African trade through better harmonisation and coordination of trade liberalisation across the continent.

It is geared towards achieving competitiveness of member states within Africa and in the global market and to encourage industrial development through diversification and regional value chain development, agricultural development and food security.

The AfCFTA is set to be implemented in phases, and some of the future phases are still under negotiation.

 Some areas of  the agreement were found on trade protocols, dispute settlement procedures, customs cooperation, trade facilitation and rules of origin, which covers goods and services liberalisation.

 There was also agreement to reduce tariffs on 90 percent of all goods, and each nation is permitted to exclude 3 percent of goods from this agreement.

However, as trading among countries is expected to commence on January 1,2021, economic experts, industry watchers and players have continued to express concerns if the continent was really prepared  for  ‘One Africa Trade.’

They noted that although it was envisioned that the free trade area will lead to increased competition, innovation and prosperity for Africa, countries should beware of anything that would undermine local manufacturers and entrepreneurs.

They expressed concern if the agreement adequately envisaged anti-competitive practices such as dumping, as surge in imports will likely threaten output, jobs and investment in the manufacturing sector and local infant industries.

However, the United Nations Economic Commission for Africa ( ECA) said  that AfCFTA  will  harmonise investment rules between its member countries and the rest of the world in order to create equal opportunity.

Mr Stephen Karingi, Director for Regional Integration at the ECA, said that investment protocol  and   regulations  that would provide level playing field for members were being put in place.

Karingi said :“The AfCFTA is a very deep and broad agreement that is not just focusing on trade in goods and trade in services.

 “It is looking at those issues that would make this regional integration functional through competition policy, intellectual property rights, investment protocol and also e-commerce.”

The AfCFTA, Secretary-General, Mr. Wamkele  Mene, said Africa was open for business and mutually beneficial investment thereby creating decent jobs and improving livelihoods.

According to him, the AfCFTA should not be perceived to be benefiting only a handful of relatively industrialised countries in Africa but all African businesses.

He therefore emphasised the need to empower women and young people in Africa as they often face significant challenges when attempting to benefit from trade agreements.

He said: “I therefore intend to take concrete steps to ensure that women and young Africans are at the heart of implementation of the AfCFTA.

“In due course, I will announce specific measures that can be put in place to enable women, young Africans and SMEs, to benefit from the AfCFTA to achieve the objective of inclusive benefits of the AfCFTA.”

Nigeria, the largest market in Africa, with a population of over 200 million people, was among the last nations to sign the agreement on July 7, 2019 at the 12th Extraordinary Session of the Assembly of the Union on ACFTA, and on November 11, 2020 its Federal Executive council approved its ratification.

At that time, the Nigerian government said its non-participation was a delay and not a withdrawal, as it was consulting with local businesses in order to ensure private sector buy-in to the agreement.

However, following the signing of the AfCFTA agreement, President Muhammadu Buhari, directed the constitution of a National Action Committee.(NAC) on its implementation.

Otunba Niyi Adebayo, Honourable Minister of Industry, Trade and Investment,   is the Chairman of the NAC,with  Mr Francis Anatogu, the Senior Special Assistant to the  President on Public Sector as its Secretary.

The mandate of the NAC is to coordinate relevant MDA’s and stakeholder groups to implement the trade readiness interventions detailed in the AfCFTA Impact and Readiness Assessment Report, including projects, policies and programmes.

As AU member countries look forward to starting the ‘One African Market’ on January 1, 2021, it is expected   that the continent becomes an investment hub and bring even prosperity in the long term.

Author Profile

Abdulrahman Obaje
Abdulrahman Obaje
Prince Abdulrahman Obaje is a Media and ICT Consultant, Journalist, online marketer, social media strategist, Mathematician and Computer Scientist based in Abuja, Nigeria. He is the Founder and the Publisher of The Informavores!. You can reach me on +234 805 939 5252 or send i-witness report directly to me on news@informavores.com.ng.

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