Ministers for Trade and Commerce from across the African continent who convened in Kigali to review the draft African Continental Free Trade Area (CFTA) Agreement, have given it a go-to allow local traders access to wider markets ahead of its approval by the African heads of state.
The agreement, which will be signed during the Extra-Ordinary Summit of AU on 21 March 2018 is a “big achievement for Africa’s regional integration efforts” stated Chris Kiptoo, the trade Principal Secretary.
The approval comes six years after the decision to form the free trade area was implemented in the 18th ordinary session of the Assembly of Heads of State and Government of the African Union that was held in Ethiopia in January 2012.
Adan Mohammed, the CS for Industry, Trade, and cooperatives led the Kenyan delegation on the two-day summit that focused on adopting an agreement detailing the legal measures on how the trade will be conducted.
Protocol on Dispute Settlement, Protocol on Trade in Goods, and Protocol on Trade in Services were some of the key conventions and Annexes in the agreement.
“The AFCFTA will unite 55 countries in Africa whose population combination has more than 1.2 billion people, with a vivacious and growing middle class, and a collective gross domestic product of more than 344.08 trillion shillings,” Mohamed said
A statement from the Ministry of Trade, Industry, and cooperatives says that once the agreement is signed, the regulatory framework of the trade in Africa will be greatly improved. There will be a substantial reduction of tariff obstacles like duties and surcharges as well as non-tariff obstacles such as licensing rules and quotas.
“It will enhance the competition at the industry and enterprise level, improve the value addition of products and utilize the economies of scale and maximum exploitation of resources,” the Ministry added.
Describing the agreement, the African Union, the Continental Free Trade Area offers an inclusive context in pursuing a developmental regional strategy alongside Boosting Intra-African Trade (BIAT) action plan targeting to double intra-African trade flows by January 2022.
The United Nations Conference on Trade and Development (UNCTAD) has stated that for Kenya to fully utilize this opportunity, there is a need for the development of internal trade capacity.
This, according to UNCTAD, includes strengthening the internal negotiations with prominent stakeholders to make sure that strategies in trade negotiations and national policies reflect the interests.
“Comprehensive regional trade policies are also mandatory,” said UNCTAD in a February report dubbed From Regional Economic Communities to a Continental Free Trade Area.