Has Africa’s free-trade area agreement been overhyped?

April 14, 2021 3711 views 33 comments 3 minutes reading time
Has Africa’s free-trade area agreement been overhyped?

There is much talk about the African Continental Free Trade Area (AfCFTA) recently launched by the African Union. The agreement seeks to tap into regional integration and create the world’s largest trading block.  It will see the reduction of tariffs, remove trade barriers and reshape the economies of participating countries.

But despite the numerous promises made, has it been overhyped?

If successfully implemented, the agreement is expected to make Africa’s economies more competitive and mark a significant step forward towards eradicating poverty.

The trade area is earmarked to connect approximately 55 countries with the capacity to generate a gross domestic product estimated at US$ 3.4 trillion. A recent World Bank report highlighted that the agreement will lead to a 10% increase in the wages of skilled and non-skilled workers. This projected growth is expected to lift an estimated 68 million people out of poverty.

Dr Vera Songwe, the Executive Secretary for the United Nations Economic Commission for Africa, emphasizes the need to diversify economies for Africa’s prosperity.

Despite the lucrative growth opportunities of the AfCFTA, there are several challenges that might hinder its implementation.

First of all, while Eritrea is the only country in Africa yet to sign the agreement, only 35 countries have ratified it. There is also the issue of trade bottlenecks that need to be dealt with such as laws on rules of origin and poor infrastructure.

According to Ottilia Anna Maunganidze, the Head of Special Projects at the Institute for Security Studies, infrastructure is critical for the success of inter-Africa trade

Some analysts state that the initial teething issues should be overlooked if Africa is to reap the benefits of the trade agreement.

We asked Dr Mukhisa Kituyi, former Secretary-General of the United Nations Conference on Trade and Development (UNCTAD), how he sees the future of the trade agreement and some of the potential issues that might lie ahead in the early stages of trading.

Considering the benefits of the AfCFTA and the bottlenecks identified, we sought to understand whether it is a far-fetched dream that has been overhyped or a timely agreement that can be achieved by working on the existing issues.

Carl Manlan, the Chief Operating Officer of the Ecobank Foundation, believes that the agreement is timely and worth pursuing.

This sentiment is echoed by Louise Mushikiwabo, Secretary-General of the Organisation internationale de la Francophonie  

Has Africa’s free-trade area agreement been overhyped? Let us know your thoughts and comments in the form below, and we’ll take them to policymakers and experts!

Image by Paul Kagame via flickr

Image by Paul Kagame via flickr

Comments

NJ

Top Comment

You're colonial masters will not allow this to happen.

EG
Trade is supposed to bring growth and in the long run it results in development.Free trade is good if only if it is free and rationale. Yet,how and what African countries exchange among themselves as most of them are producers of primary products and similar products?

GJ
Very terrible. It is already a fail agenda

LM
Africa imports almost everything its people consume. So what are they going to trade in? Let's go back to the land.

NY
I can tell you for free, this is the greatest scam ever, they just want bigger loans like from other countries

AW
Sure it will open up the economic potentials of African nations to the developed countries for economics integration.

KA
Such grouping and trading, if properly harnessed, with consideration for the issues that may be raised as concerns of economically backward members, can only lead to improved BUSINESS TRANSACTIONS within the Trade Area, more INCLUSIVE ACTIVITIES, Better knowledge of surrounding societies, greater PAR CAPITA income for the African countries and more MONEY TO THE PEOPLE...

CA
The Africa Free Trade Area is very good, the best proposal from Africa in recent time. There should be total inclusiveness of our youths who are into trade and business. CEO Ocean Atlantic World Business Link Ltd.

CA
The Africa Free Trade Area is one of the greeted idea that has come out of Africa in decades, if properly managed, Africa is very close to development and prosperity. CEO Ocean Atlantic World Business Link Ltd.

EO
I am for free trade but I'm concerned about our approach to it. The continent produces a lot of raw produce with very minimal value addition. Most of the things we consume on the continent are imported from other continents. What we need is value addition and mass production. How does the African economy benefit from trading in Chinese goods?

TI
this trade area is good for us Africans since we don't trade with the western, eastern, northern and southern,this trade area will help us to depend on ourselves not other people.

HO
Please these guys are the problem of our continent. Empty heads with no clear cut plan for the generations after them. Paper policies that can't see the light of the day.

JM
It will all be taken over by the Chinese.

EM
Disgrace leaders Right from dey one Africa countries is like round-about Nothing is working 👈 Everytime na drama drama drama

TS
This #AFCFTA will open new markets and strengthen trade across Africa. This agrrement was long overdue...Totally in support of it✊🏾 Also, Still waiting on the African continent passport?

SA
They must choose a country that is friendly but not SA is a xynophobic country special to none SA who are blacks.

NS
A grp of clueless leaders trying to empty an ocean.

GI
I think travelling between the countries is still a challenge.

BB
Useless, the West is looking over.

MC
Bosch of Idoits,that will be watching their people dying and them Idoits keep quiet and be waiting on European to do something.

KA
I think many important things were not taking into consideration before the agreement was put forward.

EM
African enemy of they self

FA
I think it's only for show

AA
Try hard Africa leader ask for the spirit of unity free trade agreement to prevail .

OP
Free trade area will open up the market for all products produced in Africa for the african population. The growth in trade will unlock capital on the continent. Let's support it fully as Africans.

VI
Yes it can

CH
Free trade among Africans is innovative ideas, and with it we Africans will advance. So i here by support the idea of free trade!

HA
I think from an economic perspective, African states for so long have been their own enemy.imposition of border restrictions and unfriendly trade tariffs have sabotaged Africa's economic viability on the world stage.Thats why it has been convenient to do business with Europe or Asia than in Africa

BR
Yes... smugglers and cartels run it

TH
Yes,it can be. Cuz all things begin as an idea and be put into action then. Why wonder?

SM
Great Insights

AN
It's definitely a step in the right direction, but will require the political will of all African governments to truly see it work.

HT
I think it an ambitious initiative. With my school motto being; ambition is the ladder to success, Africa is right to be ambitious in this direction. Therefore, AFCFTA is not an overhype.