As the well-revered Pan Africanist, Kwame Nkrumah once said, “Unity must be the keynote for our actions” - it seems that the Continent is taking a step towards unity through a free trade area that will harness the strengths of African economies.
The African Continental Free Trade Area (AfCFTA) is a free trade area founded in 2018, with trade commencing as of 1 January 2021. It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations.The agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent. This is in an effort to increase intra- African trade as in 2019 14.4 percent of official African exports went to other African countries, compared to 52 percent in intra-Asian trade and 73 percent between European nations in the same year. The free-trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization.
The general objectives of the agreement are to:
create a single market, deepening the economic integration of the continent
establish a liberalised market through multiple rounds of negotiations
aid the movement of capital and people, facilitating investment
move towards the establishment of a future continental customs union
achieve sustainable and inclusive socioeconomic development, gender equality and structural transformations within member states
enhance competitiveness of member states within Africa and in the global market
encourage industrial development through diversification and regional value chain development, agricultural development and food security
resolve challenges of multiple and overlapping memberships
The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent or more by 2022, through better harmonisation and coordination of trade liberalisation. This will be driven forward by the complementary Single African Air Transport Market and the Protocol on Free Movement of Persons. The AfCFTA agreement aims to progressively reduce and eventually eliminate customs duties and non-tariff barriers on goods and allow free provision of services in priority sectors.
There may be some problems with the implementation of the free trade area as the head of the trade bloc’s secretariat noted that many states lack the customs procedures and infrastructure to facilitate tariff-free trade. However, once these hurdles are overcome, there is huge potential to be realized through the AfCFTA.
Overall, the AfCFTA is an exciting initiative which has the potential for boosting continental unity and positively contributing to economic growth, but it is imperative that measures are taken to ensure that prosperity is shared throughout the continent as we seek to progress past the colonial model of African countries merely exporting primary commodities to be processed elsewhere.