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Monday, 03
June 2019 / 08.05AM / By Jasmin Gohl / Header
Image Credit: GIZ
·
Title: Support
to the African Continental Free Trade Area (AfCFTA)
· Commissioned by: German
Federal Ministry for Economic Cooperation and Development (BMZ)
·
Country: Member
States of the African Union
·
Lead executing agency: African
Union Commission (AUC)
·
Overall term: 2017
to 2021
·
Member States signed on to the Agreement:
1. Algeria 2. Angola 3. Burkina Faso 4. Burundi 5. Cabo Verde 6. Cameroon 7. Central African Republic 8. Chad 9. Comoros 10. Côte d'Ivoire 11. Democratic Republic of Congo 12. Djibouti 13. Egypt 14. Equatorial Guinea 15. Ethiopia 16. Gabon |
17. The Gambia 18. Ghana 19. Guinea 20. Kenya 21. Lesotho 22. Liberia 23. Libya 24. Madagascar 25. Malawi 26. Mali 27. Mauritania 28. Mauritius 29. Morocco 30. Mozambique 31. Republic of Congo 32. Namibia 33. Niger 34. Rwanda |
35. Sahrawi Arab Democratic Republic 36. São Tomé and Príncipe 37. Senegal 38. Seychelles 39. Sierra Leone 40. Somalia 41. South Africa 42. South Sudan 43. Sudan 44. Swaziland 45. Tanzania 46. Togo 47. Tunisia 48. Uganda 49. Zimbabwe
|
·
Member States NOT signed on to the Agreement:
Benin, Botswana, Eritrea, Guinea-Bissau, Nigeria, and Zambia (6).
Source: African Union Commission, 2018
Although
growth in Africa is forecasted at an average of 3.6 per cent for 2019–20, with
the world’s fastest growing economies being on the continent, there is still
much to be done. Africa is still heavily reliant on commodity and agricultural
exports while importing capital goods or food products predominantly from
outside the continent. With a global trade share of less than 3 per cent, export
diversification has yet to be achieved, as many African countries still rely on
rents from extractive exports, whilst falling behind on industrialisation
efforts.
Against this backdrop, intra-African trade remains below its potential,
accounting for about 17 per cent of the total African trade volume in 2017. In
contrast, North American intracontinental trade accounts for 51 per cent of
exports, 49 per cent in Asia, and 22 per cent in Latin America, while among
West¬ern European countries this number reaches 69 per cent. Although some
Regional Economic Communities (RECs) have achieved improvements in trade
integration through tariff reductions, the African market remains fragmented.
Non-tariff barriers such as uncoordinated bureaucratic procedures, long waiting
times at the border or lengthy and cumbersome export requirements raise trade
costs on the continent. As a result, Africa has integrated with the rest of the
world faster than with itself.
With
the Treaty of Abuja in 1991, the Member States of the Organisation for African
Unity (OAU) agreed on a road map for the creation of a common African market.
To accelerate the implementation of the Treaty and strengthen regional
integration, the African Union (AU) Trade Ministers agreed to establish an African
Continental Free Trade Area (AfCFTA). The AfCFTA has since been a flagship
programme of the AU and AfCFTA negotiations were launched in June 2015.
Out of
55 Member States of the AU, 44 signed the Agreement in March 2018 at the AU
Extraordinary Summit in Kigali, Rwanda. Phase I of negotiations covers trade in
goods, trade in services and dispute settlement. Phase II is to cover
investment, competition policy and intellectual property rights. Outstanding
issues of Phase I such as tariff schedules, rules of origin and specifics on
trade in services are yet to be completed. At the same time, the Kigali summit
kicked off the ratification process of the AfCFTA, with an increasing number of
AU Member States ratifying the Agreement in their national parliaments. The AU
comes into force with the 22nd ratification deposited at the AU.
The AU
is coordinating the ongoing free trade negotiations and the transition to
implementation of the African Continental Free Trade Area (AfCFTA).
The AU
Commission (AUC), specifically AUC´s Department of Trade and Industry (DTI) is
in charge of coordinating in BIAT and AfCFTA related activities. The project
advises the AUC Trade Commissioner on strategic policy and advocacy issues by
seconding a regional trade policy advisor to DTI´s structures. It also supports
the AfCFTA Negotiation Unit by seconding a customs cooperation and trade
facilitation expert for the preparation of the negotiations. Outstanding
negotiation issues of Phase I for trade in goods and trade in services are
being supported by a range of mechanisms, e.g. by providing tailor made
technical consultancy expertise, by organising trainings, seminars and
workshops or by selectively rendering financial support.
In
addition, GIZ is cooperating with a number of institutional partners on
specific AfCFTA related topics. The cooperation with ITC’s SheTrades Initiative
aims to embed a gender sensitive approach into the negotiating process. Joint
efforts with the United Nations Economic Comission for Africa (UNECA) and the
Trade Law Centre (TRALAC) are aimed at raising awareness and disseminating
information. Furthermore, a close cooperation with the RECs East African
Community (EAC), Economic Community of West African States (ECOWAS) and the
Southern African Development Community (SADC) is envisaged to ensure the
continental and the regional levels are linked.
The
programme is targeting AfCFTA related topics such as stakeholder involvement,
industrialisation, Special Economic Zones, Green Econ¬omy or eCommerce. In a
rapidly changing Africa, a trade agreement that reflects current socioeconomic
realities is needed to provide a solid foundation for economic integration
across the continent.
The
African Continental Free Trade Framework agreement has been signed by 52
African Member States and is operationalised with the necessary 22
ratifications after only three years of free trade negotiations. This stands
for a huge diplomatic and political success given the short timeline, the ambitious
liberalisation goals set and the heterogeneity and large number of 55 Member
States negotiating the Free Trade Area. The course is now set to actively
change, reform and agree on new framework conditions, regulations and
agreements likely to foster and boost Intra-African trade, investment and
employment in the intermediate term. Accompanying and seconding policy
documents such as the African Union Trade Facilitation Strategy or the AU
Services Sector Development Programme have been developed to set continental-wide
guiding standards for further rolling out strategies translating them on to
regional and national levels in terms of actual implementation.
Credits
The post African Continental Free
Trade Area (AfCFTA) first appeared in Deutsche Gesellschaft fuer
Internationale Zusammenarbeit (GIZ). The author Jasmin Gohl can be
reached via jasmin.gohl@giz.de
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