The African Continental Free Trade Agreement (AfCFTA)

NEWS COMMENTARY ON THE AFRICAN CONTINENTAL FREE TRADE AGREEMENT AND THE SELECTION OF GHANA TO HOST THE SECRETARIAT .

Africa has taken another bold step towards the promotion of economic growth with the official launch of the African Continental Free Trade Agreement, AfCFTA. The Accord establishing the African Continental Free Trade Agreement entered into force on 30 May, 2019 for the 24 countries that had deposited their instruments of ratification. This date marked 30 days after 22 countries had deposited their ratification instruments with the African Union Commission Chairperson as stipulated in Article 23 of the Agreement. The 22-country threshold was reached on 29 April 2019 when Sierra Leone and the Saharawi Republic deposited their instruments of ratification with the depositary.

Since then, more countries have deposited their instrument before the 12th Extraordinary Session of the Assembly of the African Union on the AfCFTA in Niamey, Niger. The 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in Addis Ababa, Ethiopia in January 2012, adopted a decision to establish a Continental Free Trade Area by an indicative date of 2017. This deadline was, however, not met. The AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class and a combined gross domestic product, GDP of more than 3.4 trillion US Dollars.

AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organisation in terms of number of countries involved. Estimates from the Economic Commission for Africa suggest that AfCFTA has the potential both to boost intra-African trade by 52-point-three percent by eliminating import duties and to double this trade if non-tariff barriers are also reduced. AfCFTA aims to create a single continental market for goods and services, with free movement of business persons and investments and pave the way for accelerating the establishment of the Customs Union. It will also enhance intra-African trade through better harmonization and coordination of trade liberalisation and facilitation across Africa.

Some analysts also expect the agreement to enhance competitiveness at the industry and enterprise levels through exploitation of opportunities for production, continental market access and better reallocation of resources. AfCFTA is in line with the Kigali Declaration and the Protocol to the Treaty Establishing the African Economic Community relating to the Free Movement of Persons, Right to Residence and Right to Establishment. To date reports say only Eritrea is yet to sign the consolidated text of the Agreement. There have been several trade related skirmishes in most member countries over domestic trade laws. It is our pray that the agreement will remove all bottlenecks that inhibit trade across the continent.

The icing on the cake for Ghana after signing the agreement was the decision by the Heads of States to locate the Secretariat of AfCFTA in Ghana. This is indeed a great honour to the country. The core mandate of the Secretariat will be to see to the implementation of the Continent-wide Free Trade Agreement. President Akufo-Addo, thanked the Assembly of Heads of States and Governments and said it is a privilege for Ghana to host the pan-African institution.

The decision by Nigeria, the biggest economy on the continent to sign up to the Agreement is indeed a great impetus to the initiative. It is vital that President Akufo-Addo assured his colleague Heads of State that Ghana will put all the requisite facilities at the disposal of the Secretariat, so that it can run as a world-class organisation. Ghana reportedly pledged ten million dollars to the African Union to support the operationalisation of the Secretariat. It is our hope that the new initiative on free trade will be supported by all member countries to ensure that its aims are achieved.

BY DOMINIC HLORDZI, Journalist.