A conglomeration of African countries for free trade across borders which is named African Continental Free Trade Agreement (AfCFTA) might have been one the continent's strides towards gains through unity had it been that all African countries agreed to it.
The agreement as said would increase trades by large margins of up to 52%.
Aside the World Trade Organisation (WTO) agreement, this is the biggest trade agreement to be signed.
This trade agreement would be a major influence to the about 1.2 billion population of the continent with a combined Gross Domestic Product of more than $2 trillion in terms of a single continental market for goods and services when implemented in full force.
The scope of the treaty are: agreements on trade in goods, services, investmen, rules and procedures on dispute settlement, including a range of provisions to facilitate trade, reduce transaction costs, provide exceptions, flexibilities and safeguards for vulnerable groups and countries in challenging circumstances.
African Continental Free Trade Agreement (AfCFTA) Details ...
|Label:||African Continental Free Trade Agreement (AfCFTA)|
|Type:|| Trade agreement|
| Agreement signed:|| 21 March 2018|
| Membership:||44 states(listed below)|
Central African Republic
Democratic Republic of congo
Republic of Congo
Sahrawi Arab Dem
São Tomé and Prí
The agreement has it that countries would remove tariffs of about 90 percent of goods traded on it's borders,while the remaining 10 percent tagged "sensitive items" would be decided on later in another phase of the treaty.
The African first major trade agreement isn't set to merely help African nations trade among it'self alone but also liberalise services associated with trade. There is what they call "non-tariff barriers" which hamper trade between African countries like unnecessary delays at the border.
There is also a greenlight that as the agreement strenghtens further,an unrestricted movement of African Nationals within their continent can be achieved. One other feature that may also cap the African free trade treaty is a single currency in African trade.
AfCFTA - How it started
The AfCFTA treaty was started by African Heads of State and Governments who were uptimistic in creating a single continental market for goods and services in member nations of the African Union, with free movement of business persons and investments using a single currency.
The idea was left idle until june 2015 when consultations and negotiations for establishing the treaty commenced during the 26th Ordinary Session of the AU Assembly Heads of State and Government in Johannesburg, South Africa.
Two years forward(2017) was the approved year inwhich the treaty would become operational, however this wasn't achieved as many member nations requested for more time to continue consultations on the potential impacts on their economies.
The treaty despite all those topsy was finally signed on March 21, 2018 during the 18th Extraordinary Session of the Assembly of AU Heads of State and Governments in Kigali, Rwanda.
The main purpose behind the agreement is inter-African trade. It is analysed that the trade between African countries is relatively limited and less - about only 10.2 percent of the continent's total trade in 2010.
A coordinator of the African Trade Policy Centre at UNECA, David Luke said: "Colonialism created a situation where neighbours stopped trading with each other. The main trading route was between African countries and European countries and between African countries and the US".
Nigeria's position in the agreement
Nigeria which is the largest economy in Africa with GDP of $405 billion is delaying its signature to the agreement, according to the government to widen and deepen domestic consultations, to ensure all concerns were addressed, as it would not sign any agreement that would not fairly and equitably represent the interest of Nigeria.
There is a chalenge that Africa's less advanced countries would be at a loss. The more advanced countries with more strongly developed manufacturing capabilities would get ease of selling goods unhindered which would eventually affect industrial development at the less developed country.