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Africa's Ambitious Path to Trade Growth – Analysis – Eurasia Review

The free trade area of ​​mainland Africa, opened in July, is a serious achievement. Its goal is to remove tariffs on 90% of the merchandise coated by intra-African trade, thereby encouraging entrepreneurship and job creation. It additionally plans many other advantages, but obstacles to their realization can’t be hoped for.

Rajiv Bhatia *

African achievements are sometimes skeptical. However the Africa Continental Free Trade Space (AfCFTA) has been praised for its imaginative and prescient and scope. It was launched on the Extraordinary African Union (AU) Summit on 12 July in Niamey, Niger on 7 July 2019, and has been described as probably the most symbolic tasks on the African agenda. dream, previous dream… turning into a reality. "[1]

What does this project mean and when will this dream come true? At a time when many major advanced economies have turned protectionist, Africa's quest to establish the world's largest free trade area [2] should be amazed. Has it succeeded in suppressing the development of one-sidedness and limited trade and overcoming the many obstacles it faces?

The Benefits of the Covenant

AfCFTA reflects a deep-seated integration of the continent as a means of political and economic liberation. It aims to create a single commercial space in Africa and is a step towards establishing a customs union with a common external tariff system. AfCFTA supporters are convinced that expanding intra-African trade will encourage entrepreneurship and job creation, boost economic growth and achieve the goals of sustainable development, including empowerment of women and young people. The second phase of the negotiations will cover intellectual property, competition and investment.

A comprehensive framework agreement regulates the liberalization of trade in goods and services and the free movement of capital and people in Africa. African companies have an average tariff of 6.1% and have higher export duties within Africa than outside Africa. The agreement will phase out tariffs on 90% of intra-African product lines.

Intra-African trade

So far, intra-African trade is relatively low: 16% of Africa's trade with the world. compared with the corresponding figures for Latin America (25%) and Asia (nearly 50%). [3]

  • In 2016-17, intra-African exports increased by 8% and thus accounted for 16% of Africa's global exports.
  • 13% of world imports from Africa came from within Africa.
  • The African-exporting nations are: South Africa, Nigeria, Egypt, Ivory Coast, and Morocco.
  • Intra-African importing countries include South Africa, Botswana, Zambia, Namibia, Mozambique and Zimbabwe.
  • In 2012-14, 75% of Africa's exports to the world were mining (oil and minerals), while less than 40% of intra-African trade was mining.

AU officials claim – based on a 2012 study – that as a result of the internal liberalization of AfCFTA, African trade will grow 52.3% by 2022 from the 2010 baseline. But this is questionable and the expected growth cannot take place over the next three years. [4]

AfCTAs, which have only recently become operational and concern continental trade, do not harm regional economic communities. (REC) in carrying out regional economic integration. The AU recognizes eight RECs [5] that have guaranteed varying degrees of market integration.

Coordination between the Continental Free Trade Area and the REC is essential, and experts note that RECs remain "necessary enforcement partners" as they represent the Advisory Committee on Senior Officials. [6]

The Member States' Commerce and other Ministries of Economy and their business communities have additional and rather complex responsibilities to bear. when they fulfill their obligations to both AfCFTA and REC.

African Partners

African trading partners are now increasingly aware that AfCFTA is a new landmark in the continent's economic development. It will facilitate a shared vision of Agenda 2063 and the Sustainable Development Goals.

UN Deputy Secretary-General Amina Mohammed noted that the agreement demonstrated Africa's "international duty" and its desire to "create a brand new path to multilateralism and sustainability". But she urged African countries to "move decisively and quickly" until 1 July 2020 " [7] [8] [7] Similarly, AfCFTA is likely to help america obtain its new trade technique to strengthen financial ties. The scientific assertion helps the view that "Now that many African countries are integrated into the single market, trade with the continent is becoming much easier – and the US-Africa trade agreement will help all parties." [9] [19659005] India

At the Gambia Nationwide Meeting on 31 July, President Ram Nath Kovind stated that this improvement offered "a new opportunity to strengthen economic relations with Africa". Earlier, when Suresh Prabhu served as Minister of Commerce and Business (September 2017 – Might 2019), he had prompt to Africa and India that they think about negotiating a free trade or preferential commerce agreement to secure nearer financial cooperation. Second, the Indian authorities continued to provide rare help – a $ 15 million evaluate – to Niger to help it arrange the AU Summit, at which the AfCFTA was officially launched. [10]

With the establishment of the African Free Trade Space, India Inc. should accelerate its plans to improve and diversify its investments in African nations. Funding-driven progress, which creates local employment and expertise improvement in Africa, ought to be an integral part of business planning.

AfCFTAs have been identified by African leaders as a serious step in the direction of the imaginative and prescient of the Founding Fathers. Abdel Fatah El-Sisi, President of Egypt and AU President, saw it as "an important step in the regional integration of the continent and a natural continuation of Africa's joint action …" and added that Africa still had "a long way to make the agreement a reality and fruit. "He also confused the need to" improve communication with the private sector. "[11]

Equally, most observers acknowledge the significance of the agreement, but point out that the commerce area just isn’t yet a actuality. for signing in March 2018, 54 of the 55 African Union nations had signed it greater than a yr later, but solely 27 nations – about half – have ratified it to date, and extra nations should achieve this as soon as potential.

Tariff concessions, non-tariff limitations, guidelines of origin and different technical elements Member States should resist the temptation to request long waivers and exemptions. The brand new secretariat to be arrange in Ghana must work.

Attention needs to be paid to expanding infrastructure links, ease of travel for Africans in Africa, and better transport hyperlinks. The problem for African governments is to give attention to such obstacles and unfinished duties.

As well as, elevated intra-African trade alone isn’t sufficient. Africa must also give attention to constructing peace, as the senior AU leader identified. "It is a delusion to talk about trade or development without peace and security." [12] The launch of AfCFTA demonstrates the power of African governments: their credibility is determined by fulfilling their promises.

* Concerning the Writer: Rajiv Bhatia is an Honorary Physician, Overseas Policy Research Program, Gateway House and former High Commissioner to Kenya, South Africa and Lesotho. International Relations Council.


[1] Mahamat, HE Moussa Faki, Speech at the 12th Special Summit to Launch the AfCFTA Operational Part, July 7, 2019, [19459902]

there can be 55 nations as soon as all African nations have signed the agreement. The area will then have a inhabitants of $ 1.2 billion and a gross home product of $ three.four billion.

[3] See & # 39; intra-African commerce profile – 2017 & # 39 ;, Tralac, March 21, 2019 and Tralac

[4] Matheson, Archie, & # 39; The AfCFTA. is commendable, however its fast benefits are exaggerated. " Arguments of Africa 26. June 2019,

[5] These are: 1. Arab Marhreb Union (UMA), 2. Eastern Eastern and South Africa (COMESA), 3. Community of Sahel-Saharan States (CEN-SAD), 4 The East African Community (EAC), 5. The Economic Community of Central African States (ECCAS), 6. The Economic Community of West African States. (ECOWAS), 7th Intergovernmental Development Community (IGAD) and 8th Southern African Development Community (SADC).

[6] & # 39; Continental Africa Free Trade Area, African Union

[7] UN Amina Mohammed pledges full support when Africa starts implements AfCFTA & # 39 ;, UNECA 07 July 2019,

[8] China is ready to support a free-trade agreement changing the game of Africa, China Daily 8. July 2019,

[9] & # 39; New Africa free. – Trade Area is Great News for America ", National Curiosity June 12, 2019,

[10] Indian Overseas Ministry, Authorities of India, $ 15 Million Grant Grant from India For Niger in holding the AU Summit on June 18, 2019, <https://www.mea.gov.in/pressreleases.htm?dtl/31449/India_extends_US_15_million_grant_assistance_to_Niger_to_organise

_the_AU_sAfrican, en 1968a_san Assertion from Niamey, July 8, 2019

[12] Mahamat, July 7, 2019.

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