Trading under AfCFTA, African Continental Free Trade Area, supported by 54 African countries is set to kickstart from January 1, 2021. What a good way to start the new year!
The deal unites an estimated $3 trillion market, and could help to realise more than $84 billion in untapped intra-African exports, according to a new report by the African Export-Import Bank (Afreximbank).
African leaders at a virtual summit in early December held that trading start on 1 January 2021 as scheduled on the African Continental Free Trade Area (AfCFTA) agreement and requested institutions to provide technical and financial support for its implementation. Sao Tome’s minister for foreign affairs says the deal presents new but solvable challenges.
“It naturally presents as any new agreement some challenges, in our opinion of air link, of movement of people in the region itself, but I believe that they are challenges, that we as we move forward in the process will be able to resolve, there is of course also the issue of customs tariffs, although we are talking about free movement. But on the list and on the products that we are going to consider as priority products for the country, so there is a whole organisation that has to be done”, Jua said.
Countries now have to harmonise custom and tariff regimes. There are currently eight regional economic blocs in Africa. According to the UN Economic Commission for Africa (ECA), the Eastern Africa region is anticipated to generateUS$ 1.8 billion in welfare gains and benefit from over 2 million jobs from the successful implementation of AfCFTA. Trading was originally planned to start on July 1, 2020 but the pandemic struck leading to the suspension of negotiations.
For Intra-African trade, 90 per cent of all goods will become tariff free from January 1 for all the countries that have deposited their instruments of AfCFTA ratification with the chairperson of the African Union Commission (AUC). A total of 36 countries have already completed this procedure.
With all the African countries, except Eritrea, participating, the AfCFTA would have the largest number of member countries in any trade deal since the formation of the World Trade Organization.
By giving a boost to intra-regional trade in manufacturing, AfCFTA is expected to increase employment opportunities, and help women get into the workforce. It can result in gradual altering of global supply chains, especially for products that require relatively lesser skills.
This article is sourced from:https://www.africanews.com