What would a continental trade bloc bring to Africa?
Pioneering free trade deal aimed at boosting intra-African business faces challenges.
A continent-wide trade deal for Africa is a major step closer to being realised after 80 percent of African nations signed an agreement in the Rwanda capital Kigali on March 21. If ratified, the African Continental Free Trade Area (AfCFTA) will be the biggest free trade agreement since the creation of the World Trade Organization in 1995.
Although regional economic powerhouses Nigeria and South Africa have so far withheld their signatures pending further domestic consultations, the margin of support for AfCFTA suggests the appetite for an Africa-wide trade bloc is at an all-time high.
The initial deal commits countries to cancel tariffs on 90 percent of goods in order to spur intra-African trade, which has traditionally lagged way behind the level of trade seen within other global regions. A continent-wide trade bloc could boost trade by at least 52% depending on the tariff and import barriers eliminated, according to the United Nations Economic Commission for Africa.
While there is pan-African support on paper, the challenges for making a trade deal work in practice are many. The African Union has set an ambitious target of just 18 months to finalise a deal for the continent. Labour unions are concerned about job outsourcing and cuts to subsidies. Domestic industries will feel the heat from incoming multinationals. And a hoped-for rise in tariff-free imports and exports is likely to be severely hindered by a lack of suitable transport infrastructure across Africa – and could leave rural areas lagging even further behind major cities.
We’ll examine who could win and who could lose under a continent-wide deal, and the prospects for a deal offering stability and security to all Africans.
On this episode of The Stream, we speak with:
Landry Signe @LandrySigne
Fellow, Brookings Institution
brookings.edu
Mukhtar Ainashe @mukhtarainashe
Political and Security Analyst
mukhtarainashe.org
Quscondy Abdulshafi @QIsHag
Sudanese Activist
democracyfirstgroup.org
Read more:
Forty-four African countries sign a free-trade deal – The Economist
African Continental Free Trade Area: what you need to know – Al Jazeera