AfCFTA: 100 days since the start of free trading, prospects seem bright

Trading under the African Continental Free Trade Area kicked off on 1 January. The coming months will likely witness a convergence of fruitful outcomes of multiple moving parts. On 1 January 2021, some 100 days ago this month, free trading officially commenced under the African Continental Free Trade Area (AfCFTA). Four days later, two Ghanaian […]

Trading under the African Continental Free Trade Area kicked off on 1 January. The coming months will likely witness a convergence of fruitful outcomes of multiple moving parts.

On 1 January 2021, some 100 days ago this month, free trading officially commenced under the African Continental Free Trade Area (AfCFTA). Four days later, two Ghanaian companies became pioneer exporters of products using the AfCFTA preferences, marking a major milestone in the short but eventful history of the trade pact. 

Alcoholic product manufacturers Kasapreko airfreighted a container-load of goods to South Africa, while Ghandour Cosmetics shipped by sea items to Guinea.

An event organized by the Ghanaian government to celebrate the first consignments of products exported under the AfCFTA conveyed much more than a perfunctory or historical symbolism, for several reasons.

Firstly, the conception, birthing, and now implementation of the AfCFTA continue to unfold with remarkable speed. 

Negotiations spanning more than five years led to the signing of the trade agreement on 21 March 2018; it entered into force on 30 May 2019; free trading began on 1 January 2021 after a six-month delay following the COVID-19 outbreak. 

First shipment

And then, the first shipments took place on 4 January 2021.

Secondly, Africa’s free trade area represents a decisive step toward the continent’s long-held regional integration aspiration.

Thirdly, the start of free trading rekindles hope in Africa’s post-pandemic recovery. The Secretary General of the Accra-based AfCFTA Secretariat, Wamkele Mene, emphasized throughout these past 100 days—and before then—that effective implementation of the trade pact is the post-pandemic stimulus Africa needs.RELATED STORIESAfrica’s free trade area opens for businessAfCFTA: Implementing Africa’s free trade pact the best stimulus for post-COVID-19 economiesAfrica’s Free Trade Area: What we must do for a smooth take-off on 1st JulyAfCFTA: Africa readying for free trade come January 2021AfCFTA: Experts, traders call for robust participation of women and youth

“Increased intra-African trade is what will drive economic development post-COVID-19,” Mr. Mene told Africa Renewal in an earlier interview.

The AfCFTA establishes a single market for made in Africa goods and services, eliminates tariffs by 90 per cent and tackles non-tariff barriers such as customs delays. 

A unified market of 1.2 billion people with a combined GDP of $3 trillion is potentially a strong foundation for industrialization. Currently intra-African exports stand at about 17% of total continental exports. Increasing this share is expected to increase value addition, help create jobs and boost incomes.

Mr. Mene has devoted considerable time and energy superintending a successful takeoff of free trading. He has been ubiquitous in Africa’s state capitals, from Niamey in Niger, to Addis Ababa in Ethiopia, Lome in Togo, Khartoum in Sudan and others, meeting with political and business leaders, youth and women traders, touting AfCFTA’s benefits, entreating traders to seize the opportunity, and highlighting solutions to emerging challenges. 

He continues to promote the agreement with eloquent aplomb—with urgency and ardency.

“We are not going to get another opportunity to integrate; this is our last opportunity,” he said at a press briefing in January.

“There is not a single African country that can work alone to trade its way out of poverty,” he opined at an event in New York just last month.

While in New York, together with Ambassador Fatima Kyari Mohammed, the Permanent Observer of the African Union (AU) to the UN and Ms. Ahunna Eziakonwa, the Director of the UN Development Programme’s Regional Bureau for Africa, Mr. Mene signed an MOU.

The MOU relates to UNDP’s support for, among others, the AfCFTA in strengthening the capacities of national customs authorities, digitizing intra-African trade and enhancing export readiness of women- and youth–led SMEs. 

The optimism heralded by the start of free trading aside, 36 AU member states have so far deposited their ratification instruments.

Countries ratifying the agreement can trade with each other based on their tariff concessions and proposed rules of origin. Currently, about 90% of the rules of origin are in, while the remainder are expected before the end of July 2021.

Meanwhile, just three countries—Ghana, South Africa and Egypt—had established the necessary customs infrastructure for trading at the start of free trading last January.

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