African trade bloc testing phase gets under way

AU commission chair, Moussa Faki.

Africa has entered a year-long phase of customs harmonisation exercises after Nigeria and Benin, former outliers of the African Continental Free Trade Area (AfCTFA), signed up for the initiative that will create the world’s biggest block for free trade.

With 27 countries now having ratified the trade area’s instruments, and a total of 54 of the continent’s 55 countries having agreed to be included in AfCTFA, the first phase of initial implementation can commence.

The African Union (AU) said five key elements of the agreement would be tested over the next 12 months: rules of origin, an online negotiating forum, elimination of non-tariff barriers, a digital payments system, and the African Trade Observatory.

The secretary general of the UN Conference on Trade and Development, Dr Mukhisa Kituyi, recently stressed that rules of origin in particular would need crucial attention for AfCTFA to work.

Depending on what transpires during the testing phase, the trade bloc is expected to be fully operational by July 2020.

Following yesterday’s decision in Niamey by Benin and Nigeria to sign on, the 32 heads of state that witnessed the ground-breaking moment, including President Cyril Ramaphosa, are expected to stay on in Niger’s capital for next Sunday’s official AfCTFA launch.

Eritrea is this only country that will not be part of the bloc, mainly because of long-standing internecine spats with its neighbour, Ethiopia.

But a recent peace accord between the two countries that will possibly provide access for Ethiopia to Red Sea ports it lost when Eritrea gained independence in 1993, will hopefully pave the way for the only non-signatory country on the continent to complete the bloc.

The AU estimates that AfCTFA will boost intra-African trade by 60% in the first two to three years, compared to current levels of about 16%.

Speaking after yesterday’s signing ceremony in Niamey, AC commission chair Moussa Faki described it as “a dream come true”.

He remarked that even though formal planning of AfCFTA had only started in 2013, the idea of trade liberalisation across the continent had been an official consideration for at least 17 years.

 

 

 


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