African Continental Free Trade Area (Afcfta) Agreement

The New Delhi Conference, held in February and March 1968, was a forum for developing countries to agree on the basic principles of their development policies. The New Delhi conference was an opportunity to finally approve the plans. The conference provided an important impetus to persuade the North to follow up on the resolutions of the First European Session and to establish generalized preferences. The target of private and public inflows to the least developed countries had been raised to 1 per cent of the North`s GNP, but the developed countries had not committed themselves to achieving that target by a specific date. This has proven to be an ongoing point of discussion at UNCTAD conferences. 44 countries initially signed the agreement on 21 March 2018. Nigeria was one of 11 African Union countries that were not initially signed. At the time, Nigerian President Muhammadu Buhari said Nigeria could do nothing that could undermine local manufacturers and entrepreneurs. [53] The Nigerian Manufacturers Association, which represents 3,000 Nigerian manufacturers, welcomed the decision to withdraw from the agreement. [53] Nigeria`s foreign minister tweeted that further national consultations were needed before Nigeria could sign the agreement.

[54] Former President Olusegun Obasanjo said Nigeria`s delay was regrettable. [55] The Nigerian Labour Congress called the agreement a « renewed neoliberal political initiative, extremely dangerous and radioactive, » suggesting that increased economic pressure would push workers to migrate under difficult and uncertain conditions. [56] There is a strong consensus that the large infrastructure gap in Africa, including transport and supply infrastructure, needs to be urgently addressed so as not to limit further trade integration. Infrastructure development is also key to addressing the devastating economic impact of COVID-19. Several committees have been established on trade in goods, trade in services, rules of origin, trade remedies, non-tariff barriers, technical barriers to trade and sanitary and phytosanitary measures. [39] Dispute resolution rules and procedures are still under negotiation, but they will likely include the designation of a dispute resolution body. [35] The Committee of Senior Trade Officials implements the Council`s decisions. The Committee is responsible for drawing up programmes and action plans for the implementation of the AfCFTA Agreement. [39] Notes: Trade volume is sectoral trade relative to Nigeria`s total trade.

The terms of trade are calculated as the difference between sectoral export prices and import prices as a percentage of total price differences in all sectors. Welfare effects are the sum of the effects of trade volume (VoT) and terms of trade (ToT). A negative toT means that the sector dilutes the positive gains. The industry`s contribution to ToT and VoT is 100%. This shows that African nations do not trade with each other because of a mismatch between what different African countries need and what is produced on the continent. This misalignment signals missed opportunities to reduce foreign imports from outside Africa and increase intra-continent trade flows. For the AfCFTA to be fully successful, more countries need to diversify their commodity production to better meet the import needs of their continental neighbours. The African Continental Free Trade Area only entered into force when 22 of the signatory states ratified the agreement, which happened in April 2019, when The Gambia became the 22nd country to ratify it. [67] [68] As of August 2020, there were 54 signatories, of which at least 30 had ratified and 28 had deposited their instruments of ratification. [69] [70] [71] The three countries that have ratified their ratification but have not yet deposited it would be Cameroon, Angola and Somalia[71][72], although Morocco is also documented for ratifying it. [73] [74] The general objectives of the agreement are as follows:[20] The scope of the AfCFTA is broad.

The agreement will reduce tariffs between member countries and cover policy areas such as trade facilitation and services, as well as regulatory measures such as hygiene standards and technical barriers to trade. Full implementation of the AfCFTA would reshape the region`s markets and economies and boost production in services, manufacturing and natural resources. The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world in terms of the number of participating countries. The pact connects 1.3 billion people in 55 countries with a combined gross domestic product (GDP) worth $3.4 trillion. It has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on the implementation of important policy reforms and trade facilitation measures. Supporters of the free trade agreement expect the AfCFTA to reduce poverty, increase business competitiveness and boost intra-African trade and investment. Based on a recent survey of 1,804 Nigerian manufacturing companies, 6 out of 10 companies expect the AfCFTA to lead to lower material and labour costs, increase production capacity, expand market and consumer size, and lower prices. Overall, Nigerian small and medium-sized enterprises are optimistic about the opportunities created by the AfCFTA, albeit with mixed feelings based on concerns about increased foreign competition and dumping of low-quality products.

Related Content Focus on Africa The African Continental Free Trade Area and trade facilitation measures could significantly mitigate the economic impact of COVID-19 in Africa Nassim Oulmane, Mustapha Sadni Jallab and Patrice Rélouendé Zidouemba Friday, May 22, 2020 Report on the greening of the AfCFTA: It`s not too late Colette van der Ven and Landry Signed Thursday, 16 September 2021, 2021 Sep 20 Past Event Green Trade under the AfCFTA: The Role of the AU-EU Partnership 9:30 – 11:00 EDT Only online countries that have ratified the AfCFTA agreement appeared to have agreed on rules of origin on more than 81% of tariff items. . . .

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