Africa is on the cusp of a historic milestone as it plans to roll out the African Continental Free Trade Area (AfCFTA) on 1st January 2021. This initiative was signed in Kigali, Rwanda in March 2018.
As of this week, 54 countries had signed the agreement, 34 countries had deposited their instruments of ratification. Also 41 countries/customs unions had submitted their tariff offers, including the EAC and ECOWAS who submitted their offers in the last few days.
“This positions the AfCFTA for a truly commercially meaningful start of trading on 1 January 2021,” AfCFTA Secretariat, H.E. Wamkele Mene, told the 13th Extraordinary Session of the Assembly of Heads of State and Government on AfCFTA in December 05, 2020
Africa has an over reliance on the export of primary commodities to traditional markets of the North.
“In other words, Africa continues to be trapped in a colonial economic model, which requires that we aggressively implement the AfCFTA as one of the tools for effecting a fundamental structural transformation of Africa’s economy and placing Africa on a path of long term industrial development,” Mene said.
Women in trade, young Africans and Small and Medium Enterprises (SMEs) confront significant challenges when attempting to benefit from trade agreements.
For the AfCFTA to be inclusive and to ensure shared growth across the continent; women, young Africans and SMEs have to be at the heart of its implementation, according to Mene.
Afreximbank has been a strong strategic partner to the AfCFTA. The two are working together on the development of a Pan-African Payments and Settlement Platform which was launched last year in Niamey.
AfCFTA will seek to work with the private sector, having had fruitful discussions with Zenith Bank about a trade portal and Standard Bank about the establishment of a US$1 billion Trade Finance Facility, which will be aimed at SMEs primarily.
“We will have to explore the possibility of this Trade Finance Facility being jointly underwritten by governments, African banks and African multilateral development institutions,” Mene said.
Added he; “As much progress as we have made, integrating 55 markets will be difficult, it is a daunting task, it will take resolute determination, decade after decade. However, to throw our hands in the air and say it is too difficult a task, is not an option.”
A recent study by the World Bank estimates that where implemented effectively, by 2035 the AfCFTA is set to lift 30 million Africans out of extreme poverty and 70 million from moderate poverty. As promising and hopeful as this projection is, as Africans, we shall have to take our destiny into our own hands and take concrete steps to ensure that these promising projections do become a reality.
