Analysis: GODFRIDAH CHANDA
THE 10th extraordinary summit of heads of state and government held on March 21, 2018 in Kigali witnessed the signing of the African Continental Free Trade Area (AfCFTA) agreement.
The summit was presented with three legal instruments for signature: the Framework Agreement establishing the AfCFTA, the protocol on Free Movement of Persons and the Kigali Declaration launching the AfCFTA.
At the meetings preceding the summit, it was agreed that countries that would not be legally able to sign the AfCFTA Agreement due to outstanding internal processes would have the option of signing the Kigali Declaration, which would be a strong political statement of commitment of AU member-states to the implementation of the AfCFTA Agreement.
The continent witnessed 44 countries signing the agreement establishing the AfCFTA, while 22 countries signed the Protocol on Free Movement on Business Persons. Zambia was among the other 43 countries that signed the Kigali Declaration launching the AfCFTA.
Minister of Foreign Affairs Joseph Malanji signed the Kigali Declaration pending outstanding work, which will be part of the built-in agenda for negotiations post the signature of the agreement. Some of the outstanding work includes negotiations on the priority sectors for trade in services, tariff liberalisation and discussions on the sensitive and exclusion lists.
This marked the conclusion of negotiations on the legal framework that will underpin the AfCFTA. The initiative to launch the AfCFTA was taken as part of Africa’s efforts towards fast-tracking the continent-wide free trade component of the African Economic Community (AEC) established by the Abuja Treaty of 1991. Then in 2012, at the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in Addis Ababa, Ethiopia, they adopted a decision to establish a Continental Free Trade Area (CFTA) by an indicative date of 2017.
The summit also endorsed the Action Plan on Boosting Intra-Africa Trade (BIAT), which identifies seven clusters: trade policy, trade facilitation, and productive capacity, trade-related infrastructure, trade finance, trade information, and factor market integration. Thereafter, in June 2015, the Assembly of Heads of State launched the negotiations and in January 2018, a decision was taken to launch the African Continental Free Trade Area in March 2018.
The free trade area, an initiative of the African Union (AU), will bring together 54 African countries with a combined population of more than one billion and a combined gross domestic product of more than US$3.4 trillion. This will pave way for the creation of the Continental Customs Union in 2019, as provided for in the Abuja Treaty.
It envisages liberalisation of both trade in goods and services in the first phase of negotiations, and extend to investment, competition policy and intellectual property in the second phase. The idea is to build on progress so far made within the Regional Economic Communities recognised by the African Union as part of the 2063 agenda of establishing the ‘Africa we want’.
The implementation of the AfCFTA will create both opportunities and challenges. Therefore, the onus is on participating countries to take advantage of emerging opportunities, while minimising the cost of trade openness. We, therefore, need to carefully assess where opportunities and challenges lie in this whole process.
For Zambia, this development awaits a lot of expectations and opportunities that will change the living standards of the people. It is anticipated that a lot of businesses will be improved through having open markets, without barriers to trade and with the right connections needed at continental level. This will ultimately allow enterprises to have quality goods and services that will be competing with multi-national corporations, thereby bringing the much-needed revenues for economic growth.
On the other hand, there is need for the country to reposition itself in terms of quality and quantity. A commodity cannot sell and compete if it is not of quality. Therefore, there is need to cautiously and urgently look at infrastructure development, improve technologies and build capacities in skill development programmes.
As a follow-up to the launch of AfCFTA, the Ministry of Commerce, Trade and Industry held a high-level sensitisation meeting on April 11, whose objective was to inform stakeholders of the developments since the signing of the agreement. The meeting was also meant to get stakeholders’ views on how the country should undertake the negotiation process going forward.
There is no doubt that the successful launching of AfCFTA by all African countries will increase intra-African trade to 52 percent by 2022, through the removal of non-tariff barriers, and product diversification by local industries due to increased competition.
The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.
The author is Ministry of Commerce, Trade and Industry public relations officer.
Analysis: GODFRIDAH CHANDA