The Zimbabwe Independent

African free trade bloc opens for business ... but challenges remain


African countries began officially trading under a new continent-wide free trade area on New Year’s Day, after months of delays caused by the global coronaviru­s pandemic.

But experts view the launch as largely symbolic with full implementa­tion of the deal expected to take years.

The African Continenta­l Free Trade Area (AfCFTA) aims to bring together 1,3 billion people in a $3,4 trillion economic bloc that will be the largest free trade area since the establishm­ent of the World Trade Organisati­on.

Backers say it will boost trade among African neighbours while allowing the continent to develop its own value chains. The World Bank estimates it could lift tens of millions out of poverty by 2035.

But obstacles — ranging from ubiquitous red tape and poor infrastruc­ture to the entrenched protection­ism of some of its members — must be overcome if the bloc is to reach its full potential.

Trade under the AfCFTA was meant to be launched on July 1 but was pushed back after Covid-19 made in-person negotiatio­ns impossible.

However, the pandemic also gave the process added impetus, said Silver Ojakol, chief of staff at the AfCFTA’s secretaria­t.

“We saw the impact on our economies of the disruption of imports due to the pandemic,” he said. “So there’s actually been an increase in political will to boost intraAfric­an integratio­n.”

Every African country except Eritrea has signed on to the AfCFTA framework agreement, and 34 have ratified it. But observers such as W Gyude Moore — a former Liberian minister who is now a senior fellow at the Centre for Global Developmen­t — say the real work begins now.

“I would be surprised if they can have everything set up within 24 months,” he said. “For long-term success, I think we’ll need to look at how long it took Europe. This is a multi-decade process.”

Historic challenges including Africa’s poor road and rail links, political unrest, excessive border bureaucrac­y and petty corruption will not disappear overnight.

And an annex to the deal outlining the rules of origin - an essential step for determinin­g which products can be subject to tariffs and duties - has not been completed yet.

Meanwhile, 41 of the zone’s 54 member states have submitted tariff reduction schedules.

Members must phase out 90% of tariff lines — over five years for more advanced economies or 10 years for less developed nations. Another 7% considered sensitive will get more time, while 3% will be allowed to be placed on an exclusion list.

Finalising those schedules and communicat­ing them to businesses must be done quickly, said Ziad Hamoui of Borderless Alliance, a group that campaigns for easier cross-border trade.

But efforts to implement the deal will also likely face resistance from countries’ domestic interest groups. Fears of losing out to more competitiv­e neighbours initially made some countries, including West African giant Nigeria, sceptical of the panAfrican project.

Still, proponents of the zone are confident that initial steps towards its implementa­tion will already allow member states to double intra-African trade by 2025.

“Economic integratio­n is not an event. It’s a process,” said the AfCF TA secretaria­t’s Ojakol. “We must start somewhere.” — Reuters.

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