AfCFTA: Boosting industrial revolution through intra-Africa trade
The shelves of many supermarkets in Nigeria boast of a large amount imported products, including toothpicks from China, toilet paper and milk from Holland, sugar from France, chocolates from Switzerland and matchboxes from Sweden.
Yet many of these products can be produced in Nigeria or found in much closer African countries with industrial bases.
Why businessmen still prefer to source their goods from halfway around the world still remain of concern. The answers are however not far-fetched. It is because of the complexity of trade regulations and high tariffs that make intra-African commerce costly, time wasting and cumbersome.
The African Continental Free Trade Agreement (AfCFTA), so far signed by 44 African countries in Kigali, Rwanda, in March 2018 tends to provide a solution to this unnecessary capital flight from Africa.
The AfCFTA is meant to create a tariff-free continent that can grow local businesses, boost intra-African trade, rev up industrialization and create jobs.
The agreement will create a single continental market for goods and services as well as a customs union with free movement of capital and businesses.
Countries joining AfCFTA must commit to removing tariffs on at least 90 percent of the goods they produce.
“If all 55 African countries join a free trade area, it will be the world’s largest by number of countries, covering more than 1.2 billion people and a combined GDP of 2.5 trillion dollars”, says the UN Economic Commission for Africa (ECA).
Speaking at a workshop of the Network of Economic Journalists for West Africa, in Monrovia, Liberia, the acting Director, ECA West Africa Office, Mr Bakary Dosso, said the workshop aims to equip newsmen to properly understand the stakes of the AfCFTA.
Dosso said that the largest number of countries that have ratified the AfCFTA where from the ECOWAS region, showing its relevance to the further development of the region.
“The general objective is to improve the quality of media coverage of AfCFTA related activities in West Africa so they can produce fact-based reports on the agreement for the benefit of the public and other stakeholders,” he said.
Also, the Liberian Deputy Minister for Administration, Ministry of Commerce and Industry, Mr Wilfred Bangura, said the training workshop will boost the development of a responsible and stronger partnership with sub-regional media organizations.
He said that the training would further improve visibility and wider dissemination of information relevant to the sub-region for economic and social development of its member states.
Also, Mr Konzi Tei, the ECOWAS Commissioner in Charge of Trade and Free Movement said the implementation of the AfCFTA would lead to a massive industrial revolution on the continent.
He said that ECOWAS was poised to benefit the most from the agreement as it was already an expert in pursuing the free movement of its people and goods across borders since 1979.
It will be recalled that Nigeria despite playing a role in drafting the AfCFTA, refused to sign the agreement on March 21, 2018, in Kigali, Rwanda.
Nigeria said it was delaying its signature to the agreement to widen and deepen domestic consultations, to ensure all concerns were addressed, as it would not sign any agreement that would not fairly and equitably represent the interest of Nigeria and indeed, her neighbors.
Some of the concerns have to do with the likelihood that it may impact on government revenue and social welfare, as elimination of all tariffs among African countries would erode the trading states’ treasury by up to 4.1billion dollars annually and deepen poverty, with millions of Africans potentially exposed to starvation and death.
Others, particularly among the poorer economies are afraid the benefits in the free trade area may not be equitably distributed among economies.