By Boris Esono Nwenfor
Experts at the Nkafu Policy Institute say the African Continental Free Trade Area (AfCFTA) will provide opportunities for African countries to lift millions of people out of poverty.
The experts were speaking this June 24 at the Mansel Hotel in Yaounde under the Nkafu Policy Institute’s (a think-tank of the Denis and Lenora Foretia Foundation) first edition of the Open Trade Initiative.
The event was held under the theme “The African Continental Free Trade Area: Benefits, Opportunities and Challenges” with discussions centred on the challenges with implementation and the benefits and opportunities of AfCFTA for African countries.
On January 1 2021, the African Continental Free Trade Area (AfCFTA), created to eventually integrate all states of the African Union into a free trade area, was effectively put in place. Amongst others, Countries that ratify the agreement agree to liberalize 90% of their tariff lines.
Speaking on the theme, Henri Kouam said: “The AfCFTA is an opportunity for African countries to integrate, connect and lift millions of people out of poverty. Countries impose very high tariffs to protect and improve on local domestic productions.”
As the global economy is in turmoil due to the COVID-19 pandemic, the creation of the vast AfCFTA regional market is a major opportunity to help African countries diversify their exports, accelerate growth, and attract foreign direct investment.
By increasing trade, lowering trade costs and streamlining border procedures, full implementation of AfCFTA would help African countries increase their resiliency in the face of future economic shocks and help usher in the kinds of deep reforms that are necessary to enhance long-term growth.
“Africa needs to benefit from its demographic dividend especially with the increase in population which can also lead to increase in resources,” Jean Cedric Kouam, Deputy Director – Economic Affairs Division said on the African Continental Free Trade Area: Benefits, Opportunities and Challenges.
“The AfCFTA can be the solution to the debt problem weighing down on African countries as its successful implementation will multiply resources and consequently end the constant need for foreign aid gotten through debts.”
Jean Cedric Kouam added: “When you trade with other countries, you become much more competitive,” Henri Kouam, Economic Policy Analyst said. “Economically, women will be very much better off with the implementation of the AfCFTA as they will be more included in the labour force and economic debates.”
The African Continental Free Trade Area (AfCFTA) agreement according to analysts will create the largest free trade area in the world measured by the number of countries participating. The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion.
The AfCFTA is expected to lift around 68 million people out of moderate poverty and make African countries more competitive. But successful implementation will be key, including careful monitoring of impacts on all workers—women and men, skilled and unskilled—across all countries and sectors, ensuring the agreement’s full benefit.”
And according to Jean Cedric Kouam “Concrete actions must be undertaken to respect the AfCFTA agreement so it doesn’t just end in wishful aspirations.”
“The African economy is mostly dominated by the informal sector and this sector continues to dominate due to increased unemployment. The AfCFTA can be the solution to putting an end to the predominance of informal enterprises,” He added.
The scope of AfCFTA is large. The agreement will reduce tariffs among member countries and cover policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and technical trade barriers.
Full implementation of AfCFTA would reshape markets and economies across the region and boost output in the services, manufacturing and natural resources sectors.