Business News of Wednesday, 22 January 2020
Source: Business & Financial Times
The Economist Intelligent Unit (EIU), the London-based business intelligence unit, is predicting that African countries are likely to postpone AfCTA taking effect from July 1 this year (2020).
The London-based business intelligent unit is making the prediction based on the hesitant behaviour of some African countries like Nigeria, which has closed its land border since August 2019 in a move to curb smuggling and protect its local industries.
Other important economies, such as Ethiopia and South Africa, are gripped by domestic crises that are absorbing reformers’ energies, it notes, The EIU is of the view that whiles pan-African institutions like the African Union and AFDB continue to push for action, it expects the agreement’s activation to be postponed until at least the end of 2020.
This has a telling effect on the proposed free trade area, as well as its secretariat that will be located in Accra. Per the EIU’s forecast, this could be another timeline missed – and it is not too hard to believe since evidence on the ground lends credence to the assertion.
Sluggish implementation of necessary legal changes and other obstacles will therefore see the vast majority of African states fail to meet the July 2020 deadline, the EIU maintains.
Nigeria, the continent’s largest economy, has had a long history of economic protectionism and worried it could be flooded with cheap goods from more competitive neighbors – thereby undermining its efforts to revive local manufacturing and expand farming to reduce dependence on crude oil exports.
These are genuine concerns, but the good news is that it was one of the last 54 nations to back the agreement to make it binding on Africa’s most populous nation. Any attempt by Nigeria to slow-pedal implementation of the new African free trade deal until it is satisfied it can compete with its neighbors could be undermining – and that’s precisely what it is currently doing with its border closure.
It is of little surprise, therefore, that the EIU is forecasting a postponement of AfCTA due to the actions of leading African economics like Nigeria.
This brings to mind the misguided stance of groups like GUTA which are urging for a reciprocation of Nigeria’s border closure by Ghana, forgetting the role we have played in times past pushing for greater intra-African trade since the days of our illustrious first president, Kwame Nkrumah – which we can safely add was one of the prime reasons Accra was chosen to host the AfCTA Secretariat.