A map showing countries in Africa in relation to whether they have
signed and ratified the free trade agreement. The information was
sourced from JIC Holdings, Africa News, World Economic Forum.
ILLUSTRATION | ANTHONY SITTI
A united African continent working towards common goals would be
a major force on the global economic stage. To this end, nations in the
region have been working to-wards an ambitious plan to create the
world’s largest trade area.
The
Gambia recently became the latest country to ratify the African
Continental Free Trade Area (AfCFTA), helping the agreement reach
critical mass to move for-ward.
One key to unlocking the region’s economic potential is making it easier for Africa’s 55 countries to trade with one another.
Currently,
Africa is a patchwork of regulations and tariffs, and trade between
countries has suffered as a result. For example, only 10 per cent of
Nigeria’s annual trade activity is with other African countries. This is
surprising given the country’s dominant economic standing and location
firmly in the centre of the continent.
As
a whole, Africa’s intra-continental trade level hovers at just around
20 per cent, while nations in Europe and Asia are at 69 per cent and 59
per cent, respectively. Clearly, there is a lot of room for growth.
WHAT IS AfCFTA?
AfCFTA
is the biggest free trade agreement since the establishment of the
World Trade Organisation. The objective of the agreement is to create a
single continental market for goods and services, with free movement of
business people and investments.
Last
year, 44 African leaders signed an agreement to ratify AfCFTA, with
half that number needed to move the agreement forward. The Gambia was
the 22nd country to announce that its government has ratified the
agreement, meeting the threshold to officially put the wheels in motion.
“We
have witnessed a historic moment for the African Continent. AfCFTA is
now set to become operational within two months, creating a single
continental market for goods and services,” said Mark-Anthony Johnson,
CEO, JIC Holdings.
The good news for
the agreement is that many of Africa’s largest economies – including
Egypt and South Africa – are already on board. There is, however, one
significant holdout.
THE ELEPHANT IN THE ROOM
Even
though the threshold for pushing AfCFTA forward has been reached,
Nigeria’s lack of commitment is still a major blow to the strength and
credibility of the agreement.
Nigeria’s
situation is complicated. The country’s economic prospects are bright,
and Lagos is on a trajectory to become the world’s largest city over the
next few decades. On the other hand, there is fierce opposition from
labour unions, and the country is home to the largest concentration of
people living in extreme poverty in the world.
“AfCFTA
is an extremely dangerous and radioactive neo-liberal policy
initiative,” said Ayuba Wabba, President of NLC, Nigeria’s largest
labour union.
While the majority of
African nations appear to be on board with the plan to enact AfCFTA, it
remains to be seen whether Nigeria comes along for the ride or decides
to go it alone.
– World Economic Forum
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