THE much-awaited African Continental Free Trade Area (AfCFTA), which is expected to boost intra-African trade, has finally come into force.
AfCFTA came into force on May 30, 2019 after it was ratified by 22 member countries including Zimbabwe, in what the African Union (AU) believes will be a continent-wide potential market of 1.2 billion people worth US$2.5 trillion in volume of trade.
AfCFTA had been ratified by 22 countries by April 29, the required number for formally notifying the AU, these ratifications, cleared the way for the AfCFTA to take effect 30 days later as dictated by the statutes.
The agreement’s operational phase is expected to be launched later on July 7 at an AU summit in Niamey, Niger.
There are high hopes that other countries such as Nigeria will join the pact soon.
Kenya and Ghana were the first countries to deposit the ratification instruments on 10 May 2018 after ratification through their parliaments. With ratification by Sierra Leone and the Saharawi Republic on 29 April 2019, the threshold of 22 ratifying states for the free trade area to formally exist was reached.
AU Commissioner for Trade and Industry Mr Albert Muchanga tweeted: “This is a historic milestone!”
“We celebrate the triumph of bold, pragmatic and continent-wide commitment to economic integration.”
Zimbabwe Foreign Affairs and International Trade Minister, Dr Moyo said: “Zimbabwe looks forward to the “operationalisation” of African Continental Free Trade Area Agreement now that the required 22 ratifications have been attained — including that of Zimbabwe.”
Secretary for Industry and Commerce of Zimbabwe, Dr Sibanda said: “We are seeing that the doors are opening for our products. We should look at it (AfCFTA) in a positive manner; looking at it in the sense that African goods are going to come into Zimbabwe and Zimbabwean goods are also going into Africa”.
“We are looking at making sure that African countries should choose to buy our stuff. We are looking at quality, improving the quality of our goods so that Zimbabwean products are a first choice for African countries.
“So we should not look at it (AfCFTA) in a negative way.”
Despite the coming into force of the AfCFTA, there remain several outstanding issues that require resolution amongst which are arbitration measures, certifying the origins of goods, tackling corruption and improving infrastructure.
Out of the 55 AU member states, 52 have signed the agreement for the establishment of the free trade area since March 2018.
Nigeria, the leading economy on the continent with a GDP of US$376,284 billion, is the notable exception but is expected to join soon.
However, some top performing African economies such as Ethiopia, Kenya, Egypt and SA, are among the 24 countries that have formally the AfCFTA.
When fully implemented, the AU sees the AfCFTA pushing economic integration and driving investment within the continent.
It is thought that the progressive elimination of tariffs will help boost intra-Africa trade by 60 percent in three years.
Currently, only 16 percent of trade by African nations is with continental neighbours. Those championing for AfCFTA argue it will help develop African economies long driven by a focus on resource exploitation, and provide a platform for negotiating with markets beyond the continent.