Africa Ministers of Trade have approved an agreement to give local traders access to the continental trade market, trade Principal Secretary Chris Kiptoo said.
Describing the move as a big achievement for Africa’s regional integration efforts, Kiptoo, on his official twitter account said the agreement is now awaiting approval of Africa heads of states.
After reviewing the 250-page draft agreement, the Ministers agreed that it factors in concerns and inputs of member states expressed during the negotiation phase.
“Today in Kigali, Africa Ministers of Trade approved the agreement establishing the Africa Continental Free Trade Area expected to be signed during Extra Ordinary Summit of AU on 21 March 2018,” he said on thursday.
The ministerial approval came six years after the decision to form the free trade area was adopted during the 18th ordinary session of the Assembly of Heads of States and Government of the African Union held in January 2012 in Ethiopia.
Cabinet Secretary Industry, Trade and Cooperatives, Adan Mohamed, led a Kenyan delegation to the two day conference which aimed at adopting the agreement which has detailed legal measure on how the trade will be practiced.
The agreement has been tailored to ensure that it is not in contravention of any international trade rules as well as is compatible to existing trade agreements in the 8 regional economic zones.
“The AFCFTA will bring together 54 African countries with a combined population of more than 1.2 billion people, with a vibrant and growing middle class, and a combined gross domestic product of more than Sh344.08 trillion ,” Mohamed said.
The agreement could significantly increase intra-Africa trade beyond the current 14 per cent.
According to a statement from the Ministry of Trade, Industry and Cooperatives, the agreement, once signed by the Africa heads of state, will improve the regulatory framework of trade in Africa.
The agreement, if implemented, could create the largest free-trade area in the world.
According to the African Union, the establishment of the Continental Free Trade Area provides a comprehensive framework to pursue a developmental regional strategy alongside Boosting Intra-African Trade (BIAT) action plan which targets to double intra-African trade flows by January 2022.
It will lead to a reduction of tariff obstacles such as duties and surcharges and non tariff obstacles such as licensing rules and quotas.
Experts say that the agreement will, among other things, facilitate the establishment of continental customs union.
“We have to enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources,” the Minister for Trade and Industry, Vincent Munyeshaka said.
Heads of state and government from the African continent are expected to meet on March 21 to sign the agreement.
As you would have been reading from our previous post in this blog, the Continental Free Trade Area is a continental geographic zone where goods and services are supposed to move with no restrictions among member states.
Once established, there shall be no administrative barriers at any country’s borders in regards to movement of goods and services.
The CFTA aims to achieve a comprehensive and mutually beneficial trade agreement among member states covering trade in goods, trade in services, investment, intellectual property rights and competition policy.
Through the agreement, countries will create a single market that will spur industrialisation, economic diversification and trade.