African Continental Free Trade Agreement (AfCFTA) to boost Intra-Africa Trade by $35-40 billion annually

The Food and Agriculture Organization of the United Nations (FAO) has disclosed the African Continental Free Trade Agreement (AfCFTA) which is the largest global free trade area by participating countries could transform the continent’s economic prospects.

The pact is expected to connect 1.3 billion people across 55 countries with the combined gross domestic product (GDP) valued at $3.4 trillion. The AfCFTA also focuses on improving the lives of women.

The FAO Representative to Ghana (OiC), Gueye Ndiaga stated this at a workshop organised by the FAO aimed at strengthening structures and frameworks for the agricultural sector to participate completely in the AfCFTA.

According to the United Nations Economic Commission for Africa (UNECA), women account for around 70% of informal cross-border traders in Africa.

 Adding that, tariff reductions under the AfCFTA will enable informal women traders to operate through formal channels, bringing better protection.

Speaking at the workshop which was attended by stakeholders from the Ministry of Food and Agriculture (MoFA), Ghana Standard Authority, Food and Drugs Authority, Ministry of Trade and Industry, among others, the Acting Chief Director of MoFA, Ankobiah Robert said the AfCFTA had been projected to boost intra-Africa trade by $35-$40 billion annually when fully implemented.

The agreement will also lift about 100 million Africans out of poverty as it will increase the level of investment in various sectors –creating decent jobs for the masses, he said.

It will also enhance the competitiveness of industry –economies of scale and reduce the trade deficit by 50.6%.

According to him, trade specifically faces structural hurdles posed by the fast emergence of new technologies, rising protectionism, and different multilateral frameworks adopted by various governments.   More so, the rampaging Civid-19 pandemic continues to impede global trade.

This Mr Robert said, amidst all these challenges, agricultural trading still remains one of the most important drivers of economic growth and a means through which African nations can insulate themselves from economic shock.

“The establishment and introduction of the African Continental Free Trade Agreement (AfCFTA) is to create a single market for goods and services in order to pave way for member nations especially Ghanaian businesses to take advantage of the agreement by producing and exporting goods and services to other African countries as well as attracting investment,” he explained.

Mr Robert averred that despite emerging opportunities projected there have been some reservations by private sector organizations and industry players on their preparedness to fully participate in the implementation of the AfCFTA.

 “We have to double up our efforts to implement the AfCFTA and ensure its success,” he emphasized.

The Programme Officer at National AfCFTA Coordination Office, Divine Kutortse, also hinted that 54 out of 55 African countries with the exception of Eritrea were expected to sign the Agreement.

While 42 countries had so far ratified the Agreement as at 10th October 2021, he said.

“To become member African countries are expected to sign the Agreement and deposit their instrument of ratification to the African Union Commission (AUC),” he explained.

According to him, for Ghana to harness the benefit of AfCFTA, the government has set up the National AfCFTA Coordination Office to help provide relevant trade information to traders and other stakeholders.

The AfCFTA which came into force on 1 January 2021 with its Secretariat in Accra, Ghana is the largest free trade area since the establishment of the World Trade Organization, and economists project that its benefits and impacts could lift tens of millions out of poverty over the next 15 years.

 By Isaac Kofi Dzokpo