The Free Trade Pact: What it means for Africa

During the week, African leaders gathered in Kigali Rwanda and did something that they would have done ages ago; signing the continental free trade area.

The move, if actualized is set to create the world’s largest single market, something that the Western World has always been trembling upon hearing it.

The agreement was signed by more than 40 African countries. Of course, some African strongmen like Yoweri Kaguta Museveni of Uganda and Muhamadu Buhari of Nigeria snubbed the historic event. That was an act of selfishness, ignorance and the failure to see the future of Africa in as far as trade and development is concerned.

Nevertheless, the signing goes down in history as having created the largest trade zone since the creation of the World Trade Organization.

More than 60 percent of the population in Africa is made of the youth. With the huge unemployment rate, Africa needed to invest heavily in trade especially the Small Medium Enterprises (SME). 53 percent of business in Africa are SME and they contribute 33 percent of the continent’s GDP.

These SMEs, however, have been facing an acute shortage of financial access and this has been made even worse by the inter-trade restrictions among African countries. The inter-trade rate among African countries stands at 3 percent, meaning many countries have not been interacting with each other through trade. All these has been as a result of trade restrictions among African countries.

With the signing of the pact, the intra-Africa trade is greatly going to be boosted. This is because Africa, with 1.2 billion people with the cumulative gross domestic product of more than 3.4 trillion dollars, presents an amazing and ideal market for products and services.

“For Africa, after decades of independence, marked by persistent under-development and a marginal place in the international system, the terms of the debate are laid down in almost Manichean terms: Unite or Perish, as Kwame Nkrumah said at the Addis Ababa founding Summit,” African Union Commission chairman Moussa Faki Mahamat told heads of states and governments at the signing ceremony.

It is sad that with 55 African Union member states, only 44 countries signed the pact. But since most African countries are democratic and democracy is determined by the majority, and the majority have signed, the pact is as good as complete.

The agreement allows for free movement of people, right to live and establish a business anywhere in Africa. This is going to be amazing.

But some questions though:

How soon is the pact going to be implemented?

Are all the members who signed the pact willing to support it to the fullest?

What about security? Are those going to move to other countries assured of their security especially from the locals?