UN boss hails new free trade area agreement for Africa

23Mar 2018
The Guardian Reporter
The Guardian
UN boss hails new free trade area agreement for Africa

UNITED Nations secretary general António Guterres yesterday congratulated African leaders for taking a leap into history by signing the African Continental Free Trade Area (AfCFTA) to create one of the world's largest trading blocs with over 50 countries.

“I salute the leadership of President Paul Kagame of Rwanda, President Mahamadou Issoufou of Niger, and the chairperson of the African Union Commission, Moussa Faki, who led the process,” Guterres said in a statement.

“This is an important step towards achieving the Sustainable Development Goals and delivering on the African agenda of peace and prosperity,” the UN boss added.

noted that with the Joint African Union-United Nations Agreement for the implementation of Agenda 2063 and the 2030 Agenda for Sustainable Development as a common framework, the UN is ready to support the continent in enforcing AfCFTA in coming months.

On Wednesday, 44 African countries signed an agreement establishing a free trade area seen as vital to the continent’s economic development.

Africa’s leaders had gathered in Kigali to launch what they say will be the world’s largest free trade area, but Nigeria had already pulled out, highlighting the challenge in getting the continent to sign up.

Establishing AfCFTA with 55 African Union members having a cumulative GDP of $2.5 trillion has long been seen as one of the AU’s flagship projects.

But Nigerian president Muhammadu Buhari, who leads one of the continent’s largest markets, earlier cancelled plans to attend the Kigali launch and called for more consultations after business leaders objected to joining the world’s biggest free trade area in terms of countries.

“The signature of the CFTA is something that makes Africa look good on paper, but in implementation it’s going to have a lot of hiccups,” said Sola Afolabi, a Nigeria-based international trade consultant.

AU trade and industry commissioner Albert Muchanga said Africa’s fledgling industries and growing middle class would benefit from the CFTA’s removal of tariffs. Currently, African countries only do about 16 per cent of their business with each other.

“If we remove customs and duties by 2022, the level of intra-African trade will increase by 60 percent, which is very, very significant,” Muchanga said.

“Eventually, we are hoping that all the African Union states will be parties to the Continental Free Trade Area,” he added.

With underdeveloped service and industrial sectors across the continent, African countries have for decades seen their fortunes rise and fall with the prices of exported commodities such as oil, cocoa and gold.