The African Union (AU) has successfully launched the much anticipated African Continental Free Trade Area (AfCFTA) as promised on Friday, January 1st, 2021.
The virtual event was graced by key speakers such as President of the Republic of South Africa and current Chairperson of the African Union, Mr. Cyril Ramaphosa, His Excellency Mahamadou Issoufou, President of Niger and AU Champion of the AfCFTA, H.E. Moussa Faki Mahamat the Chairperson of the African Union Commission, H.E. Wamkele Mene the Secretary-General of the AfCFTA and many more.
A statement from AU indicated that the Start of Trading webinar was organized to celebrate a moment in Africa’s history where a great stride in continental integration is being witnessed. They added further that, the webinar was the first of a series of events that will take place virtually and physically over the next few weeks to mark this important occasion in Africa’s fulfillment of the Organization for African Unity (OAU) founding fathers’ dream of a truly united and integrated continent.
Current statistics prove that African countries do more business with other countries abroad than with countries on the continent. The AU stated that “the percentage of trade that African countries do with each other is a mere 16 – 18%. The bulk of the continent’s trade is with the rest of the world.” It is equally a proven fact that acting in their individual capacities, most of these African countries lack the bargaining power to stand their grounds and negotiate good deals whilst dealing with economic giants.
The AfCFTA will help build such power to strengthen the voice of the continent and its policy space in the global market by way of organizing trade activities, creating a single market for goods and services on the continent, facilitating the movement of goods, services and persons through the removal of existing restrictions, promoting industrial development, value addition and sustainable and inclusive socio-economic growth.
Fortunate enough for the progress of this important initiative, all the 54 member states of the AU have already signed the Agreement establishing the AfCFTA in March 2018, in Kigali Rwanda, with 30 countries depositing their instruments of ratification with His Excellency, Moussa Faki Mahamat, Chairperson of the African Union Commission.
With a united force of all the 54 African States, the African Continental Free Trade Area will cover a market of about 1.2 billion people, with a combined GDP of $3 trillion. This will make the new AFCFT the world’s largest free trade area since the formation of the World Trade Organisation.
According to an earlier report by the World Bank, the AFCFT presents a major opportunity for African countries to bring 30 million people out of extreme poverty and to raise the incomes of 68 million others who live on less than $5.50 per day. The World Bank equally acknowledged the fact that the implementation of AfCFTA would drive $292 billion of the $450 billion in potential income gains.