5 Things You Should Know About AfCFTA
5 Things You Should Know About AfCFTA
Days after President Mohammadu Buhari signed the African Continental Free Trade Agreement (AfCFTA) many are wondering what the treaty is really all about.
Here are some key facts you should know about the :
- ORIGIN
Following the Treaty of Abuja in 1991, member States of the Organisation for African Unity (OAU) had a vision for the African market and agreed to create a common African market. To accelerate the implementation of the Treaty, the African Union (AU) Trade ministers established the African Continental Free Trade Area (AFCFTA). The AFCFTA negotiations were launched in June 2015.
- OBJECTIVES
AfCFTA focuses on cutting trade tariffs between member countries and its main purpose is to help boost trade between African countries. It seeks to make Africa a single market of 1.2 billion people and a cumulative GDP of over $3.4 trillion with free movement, to gain more industrial and value-added jobs in Africa because of intra-African trade. In addition, it also seeks to simplify trading regimes and reduce import duties which will provide much-needed help to small-scale traders especially African women who account for 70% of informal cross-border trading. It also seeks to move Africa towards economic integration, enhance competitiveness at the Industry and enterprise level, to embrace opportunities for scale production and better reallocation of resources.
- BENEFITS
As estimated by the UN Economic Commission for Africa (UNECA), the implementation of the agreement could increase Intra-African trade by 52 percent come 2022. This initiative would also cause consumers to pay less for products and services as businesses expand operations and hire additional employees. This also means more job creation. This initiative would also pave the way for more industrial and value-added jobs in Africa because of Intra-African trade and also boost the Labour intensive exports like manufacturing and agro-processing.
- PROGRESS
As at 21 March 2018, 44 out of 55 member States of the AU signed the Agreement at the AU Extraordinary Summit in Kigali, Rwanda. As of July 2019, 54 states have signed the Agreement with Nigeria inclusive, Buhari signed in Nigeria over the weekend. Swaziland seems to be the only African country yet to join this agreement. The introduction of this initiative has pushed the Africa Free Trade Area to a possible chance of becoming the largest Free Trade Area in the world in terms of participating countries since the formation of the World Trade Organisation.
IMPLICATIONS
Although the Free Trade Area offers states new growth and employment opportunities, however an increase in economic linkages between African states could also increase the risk of a country’s economic problem spilling over and having a negative effect on growth and investment in other countries. There is also the concern of countries not having the same level of benefits. Governments are also worked up about the adverse impacts of the African Continental Free Trade Agreement (AFCFTA) on the agriculture sector’s economic growth. There is also the possibility of unfair distribution of gains amongst member States.
78 Comments
Add a Comment
Please keep in mind that your comments are subject to our comment policy.To Read our comment policy, Click HERE.
Leave a Reply
ABOUT US | PRIVACY POLICY | COPYRIGHT | DISCLAIMER | TERMS OF SERVICE | 10MORENEWS © 2019 | Powered By INFOQUEST E-MEDIA ® 2783558 | Website Developed by OMDISTECH
All this their agreement without action self is tiring
Mr president is doing what will help our economy and development in our country