Africa’s free trade deal reaches minimum required ratifications for implementation

AFRICA – The African Continental Free Trade Area (AfCFTA), an agreement trade between participating African countries , has received the minimum number of ratification needed to come into effect.

This comes after Gambia signed the agreement becoming the 22nd country to ratify the deal hence effectively helping meet the minimum threshold, 12 months after the agreement was tabled in Kigali, Rwanda in March last year.

The trade bloc spanning 49 countries with a combined gross domestic product (GDP) of US$3 trillion, will facilitate inter-regional trade, boost growth and help to alleviate poverty.

According to a report by New Times Rwanda, meeting the minimum ratifications opens room for negotiation among signatory members on aspects and modalities of effecting it.

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Among the major aspects to be deliberated include rules of origin, tariff concessions, payments and settlements, non-tariff barriers and trade information among others.

Its promotion of tariff-free movement of goods, people and services across the continent is also expected to favour SME’s, who account for 80% of Africa’s employment and 50% of its GDP, according to the World Bank.

Due to the nature of its complexity as well as involving multiple parties, trade experts have said that there is need for governments to commence the process immediately in order to meet its implementation target of mid-2020.

Once in place, the AfCFTA will cover a market of 1.2 billion people and with the multitrillion GDP, it is the world’s largest free trade area since the formation of the World Trade Organization seven decades ago.

According to the United Nations Economic Commission for Africa (UNECA), it could also enhance intra-African trade by 52.3% annually.

Speaking during the recently held Africa CEO Forum, Rwanda’s President, Paul Kagame, noted that integration was key to enhancing growth and creating jobs in Africa especially in the wake of slowing globalisation which is hindering shift of production hubs into the continent.

The AfCFTA will consolidate the tripartite free-trade area that includes, the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC) and the Southern African Development Community (SADC) among others.

Gabriel Negatu, Director-General of the African Development Bank in East Africa, noted in support of the agreement that:

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“We are determined to continue our support for the African integration agenda, because this will lead to sustainable growth, will help the continent withstand external pressures and will enable African businesses to develop and become global giants.”

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