By Africa Links 24
Published on 2024-03-02 17:19:05
The African Continental Free Trade Agreement (AfCFTA) is a landmark agreement aimed at boosting intra-African trade and economic growth. Despite many countries signing up to the agreement, only four have ratified it so far. This was highlighted by Karingi at the Council of Ministers meeting in Victoria Falls.
While the benefits of the AfCFTA are yet to be fully realized, progress is being made with the Guided Trade Initiative, which has seen 31 Member States signed up. Key protocols on investment, competition policy, intellectual property, and digital trade have been completed and adopted. Additionally, 36 countries have signed up to the Single African Air transport Market.
However, there are challenges to overcome. Intra-African trade as a share of global trade has declined, staying below 3%. Both exports and imports within Africa have also decreased from 2021 to 2022. Despite these challenges, a positive note is that a significant portion of Africa’s exports consist of value-added products, providing a foundation to build upon.
High debt levels and peace and security challenges in parts of Africa are hindering the success of free trade. Karingi emphasized the importance of finance ministers signing off on the necessary instruments for trade under the AfCFTA and planning officials driving regulatory reforms to support trade under various protocols.
The rollout of the Pan African Payments and Settlement System (PAPSS) is seen as a positive development, as it will reduce trading costs and address concerns about foreign exchange availability. There is a call for increased infrastructure investment in digital and energy sectors to improve trade efficiency.
In conclusion, while there are challenges to overcome, there is progress being made in the implementation of the AfCFTA. It is crucial for more countries to ratify the agreement and for regulatory reforms to be put in place to support trade. By addressing issues such as debt levels, peace and security concerns, and investing in infrastructure, Africa can unlock the full potential of the AfCFTA and drive economic growth across the continent.
