After serial efforts to persuade Nigeria to buy into it, the much-expected African free-trade zone came into force Thursday; a step toward creating what the African Union hopes will be a continent-wide market of 1.2 billion people worth $2.5 trillion.
Reacting to the limestone, AU commissioner for trade and industry; Albert Muchanga tweeted yesterday “This is a historic milestone!” “We celebrate the triumph of bold, pragmatic and continent-wide commitment to economic integration.”
The African Continental Free Trade Agreement (AfCFTA) is meant to eliminate 90 per cent of tariffs and create a single market with free movement of goods and services.
Nigeria has consistently efforts to woo it to endorse the agreement. Africa’s largest economy is holding out under pressure from its powerful manufacturers’ lobby and labour groups.
Shipping Position Daily recalls that, a former President Chief Olusegun Obasanjo, had said last Monday that the African Free Continental Trade Area (AfCTA) Agreement will not be hindered by Nigeria’s reluctance to sign up to the process.
Obasanjo made the remark in Addis Ababa, Ethiopia, during the opening session of the Stakeholders’ Dialogue on Continental Trade and Strengthening the Implementation of the AfCTA.
The dialogue was organised by the African Union Commission (AUC) and the Coalition for Dialogue on Africa (CoDA).
The former President was reacting to concerns raised by one of the discussants at the event, on the need for stakeholders to look into the implications of AfCTA without Nigeria, the continent’s biggest economy.
Obasanjo, who recalled that Nigeria took over the processes leading to the AfCTA agreement from Egypt, wondered why it suddenly halted signing and was not even participating at the session.
He also recalled that Nigeria led the way, at ministerial level, with the government ready to be in Kigali, Rwanda, to sign up to the agreement, before the sudden turnabout.
According to him, Nigeria should resolve its domestic intrigues and not bring such to the African Union table.
“It is nobody’s fault if your country cannot resolve its domestic problem.
“If you (Nigeria) is not signing the agreement, it is unfortunate. AfCTA will go on without Nigeria.
But some of Africa’s other economic heavyweights including: Ethiopia, Kenya, Egypt and South Africa are among the 24 nations that had formally ratified it. In the last month, Zimbabwe and Burkina Faso joined the fold.
The African Continental Free Trade Agreement had been ratified by 22 countries as at April 29, the requisite number for formally notifying the AU. That paved the way for it to take effect 30 days later as stipulated in its statutes.
The agreement’s operational phase is to be launched on July 7 at an AU summit in Niger. There are still a number of outstanding issues to be resolved, including arbitration measures, certifying the origins of goods, tackling corruption and improving infrastructure.
Fifty-two of the AU’s 55 member states have signed the agreement to establish the free trade area since March 2018, with the notable exception of Nigeria, the largest economy on the continent.
The AU envisions the free trade zone, once fully implemented, driving economic integration and spurring investment within the continent.
It hopes the progressive elimination of tariffs will help boost intra-Africa trade by 60 per cent within three years. At present, only 16 per cent of trade by African nations is with continental neighbours.
Advocates for the trade zone say it will help develop African economies long driven by a focus on resource exploitation, and provide a platform for negotiating with markets beyond the continent.
But critics say poor infrastructure and a lack of diversity between the various economies could throw up barriers to this envisioned integration.
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