Postpone July 1st Trading Date for AfCFTA- CUTS International Advises African Union

April 01, 2020

A leading research and public policy think tank is calling on the African Union to defer, for one year, the July 1st date for the commencement of trading under the African Continental Free Trade Area (AfCFTA).

“In the light of the global pandemic and what is happening across the world and the continent, it is no longer feasible for the trading to commence under the agreement on July 1st this year, as initially planned. With the closure of most land and sea borders, as well as airports, it would be difficult for people and goods to move freely within the context of the agreement,” said Mr. Appiah Kusi Adomako, the West Africa Regional Director of CUTS International.

Speaking before a cross section of the media in Accra, Mr. Adomako stated that “it is undeniable that the virus has already taken a significant toll on lives and the economies across the continent. Projected revenue for African government has been hard hit and majority of businesses are not in a good shape to take advantage of the agreement.”

Mr. Adomako added that “postponing the planned date for at least six months would allow countries and businesses to recover from the covid-19 pandemic. The proposed postponement is premised on the hope that the infection curve would be flattened by the third quarter of this year and the possibility of the availability of a vaccine for Covid-19 early next year. If we decide to stick to the July 1st date, some countries would use the virus outbreak as a pretext to close their national borders to goods and services, since goods and services cannot move without people.”

He was hopeful that the postponement of the date would allow for the unfinished agenda on the protocols on goods to be completed. This would also permit the Secretariat, which is headquartered in Accra, Ghana, to be fully set up in terms of personnel and staff. The postpoment should not affect the commencement date for the second phase of negotiation on intellectual property, competition policy and investment.

The AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than US$3.4 trillion. In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization. Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 percent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced.

The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union. It will also expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation and instruments across the RECs and across Africa in general. The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources

CUTS International is an independent non-profit economic policy research, advocacy and capacity building think tank with regional centers in Accra, Lusaka, and Nairobi, Geneva, Delhi, Jaipur and Washington, DC. CUTS functional areas are in trade and development, regional integration, competition policy, economic and investment regulation as well as consumer education.

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