AfCFTA: Key to Africa's Recovery and Prosperity?

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Friday, November 13, 2020/ 02:00PM / United Capital Research / Header Image Credit: Pan African Visions

 

Recently, the Federal Executive Council (FEC) ratified Nigeria's membership of the African Continental Free Trade Agreement (AfCFTA) less than a month to the deadline. The deal which takes effect tentatively on 1 January 2021, was pushed back from July 2020 to allow governments to concentrate on fighting the pandemic. Nigeria's decision to ratify the trade deal is a major win for the ACFTA. Nigeria accounts for c.17% of the continent's GDP. The agreement is set to create the largest trading bloc since the World Trade Organisation (WTO) in 1995. It promises to improve trade and promote intra-regional investment in Africa by removing 90.0% tariffs on goods and services. When fully operational by 2030, AfCFTA is expected to cover a market of 1.2bn people, with a combined GDP of $2.5trn.

 

Despite the promise of the AfCFTA and the obvious commitment displayed by African nations, historical precedents and an unwillingness to match words with deeds suggest noncommitment and cast a shadow on the optimistic outlook. To name a few, closed land borders as observed in Nigeria and regional tensions between Kenya and Somalia are indications of potential constraints. Additionally, failure to address infrastructure deficits and security challenges are significant threats to the long-term efficacy of the agreement.

 

For the AfCFTA to achieve its goal of unlocking economic growth and enhancing competitiveness on the continent. There has to be sustained political will to bolster competitiveness through structural reforms and investment in infrastructure and human capital.

 

Top African Stories

  • Nigeria ratifies membership of AfCFTA . Read more
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Looking Forward

Angola

Oct-2020 Inflation Report - November 23rd

Oct-2020 Net Reserves - November 22nd

 

Ghana

Oct-2020 M2 Money Supply - November 23th

 

Kenya

Oct-2020 Inflation Report - November 30th

 

Morocco

Oct-2020 M3 Money Supply - November 19th

Oct-2020 Inflation Report - November 22nd

 

Nigeria

Nov MPC- November 24th

Oct-2020 M2 Money Supply - November 28th

Oct-2020 Private Sector Credit - November 28th

 

South Africa

Oct-2020 Inflation Report - November 25th

Oct-2020 Private Sector Credit- November 30th

Oct-2020 Trade Balance - November 30th

Oct-2020 Monthly Budget Balance - November 30th

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