The African Continental Free Trade Area (AfCFTA) protocol has been given a head-start and set to enter into force on May 30, 2019.
This date marks 30 days after the 22nd instrument of ratification was deposited with the Chairperson of the African Union Commission (AUC), Ambassador Albert Muchanga, which is a designated depositary for this purpose – an essential step for the AfCFTA to enter into force.
On April 29, the last two countries to have received parliamentary approval for ratification of the AfCFTA Agreement deposited their instruments of ratification with the depositary, paving the way for the AfCFTA’s entry into force.
According to Article 23 of the Agreement, entry into force occurs 30 days after the 22-country threshold is reached.
The 22 countries that have deposited their instruments of AfCFTA ratification with the AUC Chairperson are Ghana, Kenya, Rwanda, Niger, Chad, Congo Republic, Djibouti, Guinea, eSwatini (former Swaziland), Mali, Mauritania, Namibia, South Africa, Uganda, Côte d’Ivoire, Senegal, Togo, Egypt, Ethiopia, The Gambia, Sierra Leone and the Saharawi Republic. Additionally, Zimbabwe has received parliamentary approval for ratification but was yet to deposit its ratification instruments with the AUC Chairperson
The trade zone will be operational for these countries from July 17, this year, after its inauguration, to becoming the real engine of growth and industrialisation for accelerated continental development.
Mr Lamin Jobe, Gambia’s Minister of Trade moved that crucial motion in the national assembly to ratify the AfCFTA agreement completing the threshold.
Ambassador Muchanga said “This is good news! The Parliament of The Gambia has approved the ratification agreement enabling us to meet the minimum threshold.”
“The AfCFTA market is being born and is one step ready for the launch of its operational phase in July, this year.”
“The AfCFTA’s work on rules of origin, tariff concessions, payments and non-tariff barriers and trade information are the other steps, which are also progressing very well for the launch,” he added.
Mr Tei Konzi, Commissioner, Trade and Free Movement at the Economic Community of West African States (ECOWAS), in a response to the Ghana News Agency questionnaire on the matter said, creating a trade borderless regime for the continent has gained positive reality, entreating those countries still contemplating to do the needful.
He said expectations are that trade among African states will increase to 52 per cent, valued at about US$ 35 Billion by 2022, when the AfCFTA comes into reality.
Mr Bakary Dosso, Ag. Director, Economic Commission for Africa (ECA) Sub-Regional Office-West Africa said “The AfCFTA agreement is a commendable milestone for this flagship project of the Agenda 2063 of the African Union. We are indeed proud that The Gambia, a West African country makes this happen.”
He said the AfCFTA agreement aims to boost intra-African trade by making Africa a single market of 1.2 billion people and a cumulative GDP of over $3.4 trillion.
He said “Trade among member states was the way to go,” adding that, 91 per cent of Africa’s export trade with the global world was only six per cent of trade volumes and looking inward was positive.
The UN Economic Commission for Africa (UNECA) estimates that the implementation of the agreement could increase intra-African trade by 52 per cent by 2022 (Compared with trade levels in 2010) and double the share of intra-African trade, currently around 13 per cent, by the start of next decade.
African leaders held an Extraordinary Summit on the AfCFTA from March 17-21, 2018, in Kigali, Rwanda, during which the Agreement establishing the protocol was presented for signature, along with the Kigali Declaration and Protocol on Free Movement of persons, Right to Residence and Right to Establishment. In total, 44 out of the 55 AU member states signed the consolidated text of the AfCFTA Agreement, 47 signed the Kigali Declaration and 30 signed the Protocol on movement on Free Movement.
Since the summit, eight countries have signed the AfCFTA agreement-South Africa, Sierra Leone, Lesotho, Burundi, Namibia, Guinea Bissau, Botswana, and Zambia-bringing the total number of signatories to 52.
Nigeria, the largest economy in Africa, Benin and Eritrea are the only AU countries yet to sign the AfCFTA Agreement.
Perhaps the reluctance of Nigeria’s President Muhammadu Buhari to sign and ratify the Agreement is borne out of fears from the manufacturers in that country through its National Association of Nigeria Traders that the AfCFTA would create a phenomenon of dumping of goods produced outside of Africa into Nigeria’s market through smaller member countries, among others.
But Professor Benedict Oramah, President of Afreximbank in a lecture this week, “Leveraging the AfCFTA to Boost Nigeria’s Economy and Development,” allayed the fears of the manufacturers that there were protocols in the Agreement, including that of stringent rule of origin to deal with their concerns, more so, when there were dispute settlement mechanisms embedded that would allow for grievance resolution in such matters.
He encouraged the manufacturers to retool and be ready to participate in the African and global market.
Ghana stands to gain from the expected variety of goods and services, huge market outlets, reduction of market fluctuations, job opportunities, attract foreign direct investment, boost manufacturing sector, spur economic growth and accelerate infrastructural development.
Meanwhile, the IMF has warned the government to delay signing the protocol this year, saying the country may experience revenue shortfall.
The main objectives of the AfCFTA are 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.
It will also expand intra-African trade through better harmonisation and coordination of trade liberalization, and facilitates instruments across the Regional Economic Commissions and across Africa in general. The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.