Connect with us

Game Changer

GAME CHANGER: 44 Out of 55 African Leaders Sign Historic Free-Trade Agreement To Boost Economic Growth On The Continent

Published

on



African leaders have signed an agreement to set up a massive free-trade area to improve regional integration and boost economic growth across the continent. The deal to create the African Continental Free Trade Area (AfCFTA) was signed at an extraordinary summit in Kigali, Rwanda by representatives of 44 of the 55 African Union (AU) member states.

Only 16 percent of Africa’s trade takes place between countries on the continent today, according to the union. The commission expects that numer to jump to more than 50 percent if all 55 nations sign on to the pact.

“Our peoples, our business community and our youth, in particular, cannot wait any longer to see the lifting of the barriers that divide our continent, hinder its economic takeoff and perpetuate misery, even though Africa is abundantly endowed with wealth,” said AU Commission Chair Moussa Faki Mahamat.

Albert Muchanga, the commissioner for trade and industry at the African Union Commission, which oversaw the negotiations, said the new agreement also aimed to create jobs and broader economic diversification, in particular by overcoming the continent’s reliance on exporting resources like minerals and oil, and by reducing non-tariff business hurdles, like onerous regulation. He also said yearly monitoring and evaluation will yield better results for this agreement than for its regional predecessors.

Why Some Countries Did Not Sign

The list of all countries that did not sign the agreement was not immediately available. We do know that some of the countries holding out include Nigeria, South Africa and Zambia.

New York Times reported that of the 11 holdouts, Nigeria and South Africa represent $700 billion — or one-third — of the $2.1 trillion in gross domestic product across all 55 African countries. The two countries are also home to 242 million people, or 20 percent of Africa’s population of 1.2 billion.

Nigeria’s Reasons

Nigeria’s President Muhammadu Buhari

Nigeria pulled out of the signing ceremony after President Muhammadu Buhari cancelled his attendance on Sunday. A statement at the time said the decision was made “to allow time for broader consultations”.

Buhari who has since set up a presidential committee to take two weeks widening consultations on AfCFTA, believes that the economic and security implications of Nigeria signing the deal must be further discussed.

‘‘We will not agree to anything that will undermine local manufacturers and entrepreneurs, or that may lead to Nigeria becoming a dumping ground for finished goods,’‘ Buhari explained.

Olusegun Obasanjo, a former president of Nigeria and an elder statesman on the continent, called the Buhari administration’s reluctance “criminal,” according to KTPress, a Rwandan news outlet.

“I am surprised that any African leader at this time would be doubting or debating the benefits of what is going to be signed here and fail to show up,” he said.

“The signing and implementation of the African Continental Free Trade Area (AfCFTA) will enable a shift from dependence on assistance to increased trade.

“The establishment of the Free Trade Area will result in the establishment of a market of over one billion two hundred million people, with a combined gross product of over three trillion dollars.”

“That is where our salvation lies, trading amongst ourselves and consequently developing our economies. The agreement will inspire a change a perception of the continent by the rest of the world,” he said.

South Africa’s Reasons

President Cyril Ramaphosa signs the Kigali Declaration on the establishment of the African Continental

Cyril Ramaphosa did not sign the crucial agreement at the African Union  (AU) Extraordinary Summit in Rwanda’s capital Kigali — only signing the declaration on the establishment of the African Continental Free Trade Area (AfCFTA).

Ramaphosa said that his government welcomed the “historic moment” saying that it had been dreamt of by the founding fathers of the AU, saying that South Africa was pledging itself totally to opening up trade by signing the declaration.

“We are part of this process of opening up Africa for trade. All that is holding us back from signing the actual agreement is our own consultation process. We still  need to consult at home, to consult in Cabinet, to consult the partners at [the National Economic Development and Labour Council ] Nedlac, and finally to consult Parliamentarians, ” Ramaphosa said.

“So we are really going the clean up process of ensuring that everybody is on board. As far as we are concerned as South Africa we are very much part of it. The agreement therefore is very much alive, it’s not dead in the water. We as South Africa want free trade in Africa because we are an important player in the African continent.”

Zambia’s Reasons

Zambia President Edgar Lungu

Zambia is another country that did not sign the AfCFTA as it was still conducting internal negotiations on some protocols in the agreement, a Zambian official said. Zambia’s foreign minister, Joseph Malanji, said Zambia only signed the African Free Trade Area Declaration and not the agreement.

He said in a statement that Zambia had negotiated the protocol on goods and services and the dispute settlement mechanism, while the remaining protocols, including on trade competition, investment and the intellectual property, were yet to be negotiated.

The Minister, however, said the signing of the declaration shows that Zambia stands with all other African countries in the quest to improve intra-Africa trade.

Meanwhile, Zambia’s commerce, trade and industry minister Christopher Yaluma said in the same statement that Zambia will not sign the protocol on the free movement of people as the country was not ready for it.

Moving Forward

Rwanda President Paul Kagame

Rwanda, which hosted the extraordinary summit, went to great lengths to make it happen in the year when its president Paul Kagame is chairing the African Union.

The agreement will come into force after 22 countries ratify it in their national parliaments, which is expected to happen within the year. Thereafter, countries will be added as they ratify.

The agreement commits countries to removing tariffs on 90 percent of goods, with 10 percent of “sensitive items” to be phased in later. It will also liberalize trade in services and might in the future include free movement of people and a single currency.

Read More Here >>

Facebook Comments

Advertisement
Click to comment

Leave a Reply

Advertisement

Recent Posts

Products

FACEBOOK

%d bloggers like this: