KIGALI – On Wednesday, African leaders attending the 10th Extraordinary Summit of the African Union (AU) in Kigali, signed the African Continental Free Trade Area (afCFTA) agreement, in what has been termed the largest trade deal agreement since the creation of the World Trade Organization (WTO).
The deal creates a continental free trade market of 1.2 billion people, with a combined GDP of more than $3.4 trillion. The objective is to boost intra-continental trade and rely less on the volatility of commodity prices that affect many exports.
Rwandese President Paul Kagame during the AU summit on free trade in Kigali, Rwanda, on March 21, 2018. Credit: AP
According to AU Commission Chairman, Moussa Faki Mahamat, the aim is to have the trade agreement, signed by 44 of the 55 member states, enter into force by the end of this year. While states can now ratify the deal, the number of countries needed to put the agreement into force has not yet been agreed upon.
“Our peoples, our business community and our youth in particular cannot wait any longer to see the lifting of the barriers that divide our continent, hinder its economic takeoff and perpetuate misery, even though Africa is abundantly endowed with wealth,” said Mahmat.
AU Commission Chairperson Moussa Faki Mahmat.
He then urged a strong follow-up to “confound those who, outside Africa, continue to think, with barely concealed condescension, that our decisions will never materialize.”
While Africa’s largest economies like Nigeria and South Africa are expected to benefit most from the deal that progressively eliminates tariffs and other trade barriers, they worry about a migration influx into their countries by those from poorer countries.
Despite afCFTA being hailed as the biggest trade deal agreement since the formation of WTO, skepticism and divisions remain among some African leaders still unwilling to endorse it, with Nigerian President leading that charge.
Nigerian President Muhammad Buhari held out from signing the free trade agreement.
“We will not agree to anything that will undermine local manufacturers and entrepreneurs, or that may lead to Nigeria becoming a dumping ground for finished goods,” read a statement from Nigerian President Muhammadu Buhari’s office.
On the other hand, while South Africa’s new President, Cyril Ramaphosa expressed support for afCFTA, hailing Wednesday’s summit as a “historic moment,” he held off on signing the actual agreement until relevant laws and regulations have been established.
South African President Cyril Ramaphosa in Kigali, Rwanda. Credit: Twitter
Speaking in Kigali, Ramaphosa said although South Africa welcomed the “historic moment which was dreamt of by the Founding Fathers of the African Union,” his country needed some time to consult before commitment to sign.
“All that holds us back from signing the actual agreement is our own consultation process,” he added.
“We still need to consult at home, consult in Cabinet, to consult our various partners at Nedlac but also to finally with our Parliamentarians so we are really just going through what you would call the ‘clean-up process.’
South African President Cyril Ramaphosa in Kigali, Rwanda during the afCAFTA summit, March 21, 2018. Credit: Twitter
“Everybody’s onboard at home, so far as we are concerned. We are part of this.
Some of Africa’s fastest growing and strongest economies among them Ethiopia, Kenya and Ghana signed the deal.
“Africa is stronger when we work together,” said Niger’s President Mahamadou Issoufou, who led the free trade effort.
However, the reluctance by the continent’s two top economies, Nigeria and South Africa, to stay on the sidelines undermines the effort and diminishes the trade agreement’s impact.
It is also not clear why other countries like Zambia, Botswana, Lesotho, Namibia, Eritrea, Burundi, Guinea Bissau and Sierra Leone are staying out of the block.
Presidents Paul Kagame of Rwanda (L), Uhuru Kenyatta of Kenya (C) and Mahamadou of Niger (R) in Kigali, Rwanda during afCAFTA, 21 March, 2018.
Africa already has an alphabet of regional overlapping and often competing trade zones that still need to be worked on to create truly free open markets without non-tariff barriers where there is free movement of people, goods and services. These are SADC in southern Africa, COMESA for East and some parts of southern Africa, ECOWAS for West Africa as well as the newest block – EAC for East Africa driven largely by Kenya.
Although afCAFTA has been hailed as a positive step, there is a call for individual governments to do more to ensure free flow of people, goods and services across borders, prompting one analyst to say,
“If they just sign the agreement without opening the borders, without getting rid of non-tariff barriers and if they don’t work on free movement of people, it is not going to work.”
Forty-four AU member states signed the continent’s biggest Free Trade Agreement, 43 signed the Kigali Declaration and only 27 out of the 55 committed to the Protocol on the Free Movement of People.
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