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African countries officially began trading under a new continent-wide free trade area on Friday, after months of delays caused by the global coronavirus pandemic.
But experts view the New Year’s Day launch as largely symbolic, and full implementation of a deal is 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 Organization.
Supporters say it will boost trade between African neighbors and allow the continent to develop its own value chains. The World Bank estimates that it could lift tens of millions of people out of poverty by 2035.
“A new Africa is emerging with a sense of urgency and purpose and an aspiration to become self-reliant,” Ghana’s President Nana Akufo-Addo said during an online launch ceremony.
But the obstacles, ranging from ubiquitous bureaucracy and poor infrastructure to entrenched protectionism by some of its members, must be overcome for the bloc to reach its full potential.
Covid-19 problems
Trading under the AfCFTA was supposed to start on July 1, but was delayed after Covid-19 made in-person negotiations impossible.
However, the pandemic also gave the process an additional boost, said Wamkele Mene, secretary general of the AfCFTA Secretariat.
“Covid-19 has shown that Africa is too dependent on the export of primary products, too dependent on global supply chains,” he said. “When global supply chains are disrupted, we know that Africa suffers.”
All African countries, except Eritrea, have signed the AfCFTA framework agreement and 34 have ratified it.
But observers like W Gyude Moore, a former Liberian minister who is now a senior fellow at the Center for Global Development, say the real work begins now.
“I would be surprised if they could have everything set up in 24 months,” he told Reuters. “For long-term success, I think we will have to look at how long it took Europe. This is a multi-decade process. “
Historic challenges such as poor African road and rail connections, political unrest, excessive border bureaucracy and petty corruption will not disappear overnight.
And an annex to the agreement outlining the rules of origin, an essential step in determining which products may be subject to tariffs and duties, has yet to be completed.
Meanwhile, 41 of the 54 member states in the zone have submitted tariff reduction programs.
Members must phase out 90 percent of tariff lines over five years for the most advanced economies or 10 years for the least developed nations.
Another 7 percent of economies deemed sensitive will get more time, while 3 percent may be included in an exclusion list.
