Long road ahead for AfCFTA

Gulf Today Report

The African Continental Free Trade Area (AfCFTA) was supposed to kick off months ago but coronavirus pandemic and slow pace of negotiations delayed it.

The AfCFTA is described as the world’s largest single market based on member nations, it is made up of more than 50 economies. 

According to Jakkie Cilliers, head of African Futures and Innovation at the Pretoria-based Institute for Security Studies, the road to cancelling tariffs, red tap slashing and gains is long.

The AfCFTA was initiated in 2019 by the African Union after 17 years of negotiations, it has been ratified by all 55 AU members aside Eritrea.

Internal trade within Africa stands at 16 per cent, AfCFTA hopes to take it up to 60 per cent by 2034, creating an economic bloc of $3.4 trillion.  

"There are considerable tariff requirements that still need to be agreed on between the various countries," Cilliers said. 

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Market integration 

One of the obstacles of AfCFTA is bringing together over 50 markets that are at varying levels.

"There is still a significant amount of negotiations that have to occur," Cillers warned. "Trade negotiations are incredibly complex because every individual tariff line needs to be negotiated and agreed upon."

Another stumbling block is putting together existing or future trade agreements between Africa or Individual African countries with Europe, China and the United States. 

Cillers added that "the whole intention of the continental feature idea is to build regional value chains and to allow Africans not only to trade commodities but also to trade more value-added goods.”

"If Africa does not proceed down this road it will increasingly become irrelevant."