AfCFTA: Ambitions of free trade must move beyond talk

The Africa Report | 3rd February 2023

By Jonas Nyabor

For two days in the gorges of Ghana’s Akuapem mountains, government officials from across Africa, business leaders and trade policy experts discussed and agreed on terms for accelerating the trade objectives of the AfCFTA at the inaugural Africa Prosperity Dialogues.

Nearly four years since its launch, the African Continental Free Trade Area remains miles behind its target of a single major trade area although 44 countries have so far deposited their documents of ratification.

The secretary-general of AfCFTA, Wamkele Mene, says progress has been steady but recent geopolitical events make it an urgent imperative for hastened actions.

“Africa’s challenges are opportunities… It should be a matter of concern to us as Africans that a country of 43 million people was feeding a continent of 1.3 billion people so when we are in a geopolitical context that we are in today and we are not able to import grains from this country, we suffer a food insecurity crisis,” he said.

Mene added: “The private sector creates jobs, not governments, not the AfCFTA secretariat. Collectively it is our job to establish the requisite investment climate so that African businesses can take advantage.”

Decisive actions needed
Moving forward the AfCFTA agenda towards shared prosperity on the continent will require decisive actions by state parties in the areas of free movement of people and goods, border security and management systems, and transport infrastructure development, among others.

Current value chain priorities for the AfCFTA secretariat towards job creation and industrialisation on the continent are;

• Agriculture and agro-processing;
• Transport and logistics;
• Pharmaceuticals;
• Automotive sector.

After full implementation, AfCFTA is expected to boost intra-regional trade to at least 33% from the current 10% in the next decade with a market size of 1.2 billion people and combined GDP of $2.5trn across the 54 member states.

Jobs and income growth driven by AfCFTA will help to lift at least 50 million people out of extreme poverty by 2035, according to analysts, however, the slow pace of action is becoming a source of worry.

After setting in motion the new guided trade initiative which is facilitating trade amongst Ghana, Kenya, Rwanda, Tanzania, Egypt, Mauritius, Cameroon and Tunisia last year, the AfCFTA secretariat has concluded negotiations for phase II protocols.

The protocols will establish a single investment promotion authority for Africa and develop a single market integration regulation that will strengthen public health on the continent and improve food security.

“We’ve learned our lessons from the Covid-19 pandemic. When global supply chains are disrupted, Africa suffers due to the lack of industrial capacity on our continent but through innovation and intellectual property rights and vaccine manufacturing, we can create jobs contributing to Africa’s industrialisation and most importantly improvement of public health,” Mene said.

Coordinator for Africa Trade Policy Centre at the United Nations Economic Commission for Africa, Melaku Desta, tells The Africa Report that state parties must be held accountable for their pledges towards AfCFTA if the targets are to be met soon.

‘Future is bright’

“The future is bright but we need to take up the task and work towards it. We have the framework but we need to push businesses, academia, analysts and especially the governments to take realistic actions. Governments, as the implementers, must be held accountable for their commitments towards AfCFTA,” he says.

Strategy advisor on Africa at UNDP, Joy Kategekwa, said delays in the full realisation of free trade in Africa are concerning and suggests the appointment of champions to lobby state parties to make do their promises.

“The delay is frustrating… Ramping up support is important and we can consider getting a champion to drive this. When countries ratify these agreements they are making a promise that they shall change their regimes. The promise of preferential treatment is very powerful and we must revisit that responsibility on countries,” she tells The Africa Report.

The AfCFTA secretariat, Africa Prosperity Network, and UNDP are hoping to make prosperity dialogues an annual event to track the continent’s progress towards a fully integrated free trade area.