Excitement as Africa counts down the hours to start trading under AfCFTA

Business news for Friday, January 1, 2021

Source: africanews.com

2021-01-01

The commercial phase under the African Continental Free Trade Area (AfCFTA), signed by 54 of the 55 countries in Africa, will begin on January 1, 2021.

The deal ties together an estimated $ 3 trillion market and could help garner more than $ 84 billion in untapped intra-African exports, according to a new report from the African Export-Import Bank (Afreximbank).

African leaders at a virtual summit in early December, mber argued that trade starts on January 1, 2021 as scheduled in the African Continental Free Trade Area (AfCFTA) agreement and called on institutions to provide technical support and financial for its implementation.

São Tomé’s foreign minister says the deal presents new but solvable challenges.

“Naturally, like any new agreement, it presents some challenges, in our opinion of air link, of movement of people in the region itself, but I think they are challenges, which as we advance in the process we will be able to solve. issue of customs duties, although we are talking about free movement. But in the list and in the products that we are going to consider as priority products for the country, then there is a whole organization that has to be done, “said Jua.

Countries must now harmonize customs and tariff regimes. There are currently eight regional economic blocs in Africa.

According to the United Nations Economic Commission for Africa (ECA), the East Africa region is projected to generate US $ 1.8 billion in social benefits and benefit from more than 2 million jobs thanks to the successful implementation of the AfCFTA .

The trade was originally planned to begin on July 1, 2020, but the pandemic struck and led to the suspension of negotiations.

For intra-African trade, 90 percent of all goods will be duty-free as of January 1 for all countries that have deposited their instruments of ratification of the AfCFTA with the president of the African Union Commission (AUC). A total of 36 countries have already completed this procedure.

With the participation of all African countries except Eritrea, the AfCFTA would have the largest number of member countries in any trade agreement since the formation of the World Trade Organization.

By giving a boost to intraregional manufacturing trade, the AfCFTA is expected to increase employment opportunities and help women enter the workforce. It can result in a gradual disruption of global supply chains, especially for products that require relatively minor skills.