In Summary
  • Compared to other economic blocs, African countries do not trade with each other as much as they should and AfCFTA may be a panacea in this regard.

  • And expansion and success of intra-regional trade in Africa will depend on mobility of people, especially business travellers.

  • Implementation of the protocols for free movement of people will certainly be beset by impediments such as security concerns.

On July 7, the African Continental Free Trade Area (AfCFTA) officially came into operation at the 12th Extraordinary Summit of the African Union in Niamey, Niger. With this flagship project of the AU’s Agenda 2063, the continent could become the single largest market, covering 55 countries, 1.5 billion people and a GDP of $2.5 trillion.

IMPEDIMENTS

AfCFTA is aimed largely at fostering intra-regional trade in Africa. According to the Brookings Institute, intra-regional trade accounts for 17 per cent of exports in Africa, 59 per cent in Asia and 69 per cent in Europe. AU’s targets 50 per cent intra-regional trade as a share of the continent by 2050.

Compared to other economic blocs, African countries do not trade with each other as much as they should and AfCFTA may be a panacea in this regard. And expansion and success of intra-regional trade in Africa will depend on mobility of people, especially business travellers.

AfCFTA will be implemented in phases. Phase 1 entails, among others, trade in goods and services, tariff liberalisation and non-tariff and dispute settlement. Phase 2 will cover aspects such as competition policy, intellectual property rights, investments and movement of business persons across borders. The aim is to be trading by July 1 next year.

Implementation of the protocols for free movement of people will certainly be beset by impediments such as security concerns, local labour market needs, socioeconomic disparities and fear of health epidemics, that will require the leaders to be accommodating, mindful and pragmatic.

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