Rwanda ready to trade under the AfCFTA

Rwanda has recently declared its readiness to trade under the African Continental Free Trade Area (AfCFTA), a groundbreaking agreement that aims to boost intra-African trade. This move comes at a critical time as the continent grapples with the economic fallout from the COVID-19 pandemic. With Nigeria experiencing a 15.8% year-on-year inflation rate in December 2020, many African countries are looking towards initiatives like the AfCFTA to stimulate economic growth. Ridle Markus, an Africa Strategist at Absa Corporate & Investment Banking, shared insights on Rwanda's proactive approach and the potential impact of this decision. While Rwanda has swiftly positioned itself to take advantage of the opportunities presented by the AfCFTA, Markus highlighted that not all countries may be ready to fully implement the trade agreement. This could lead to delays that hinder the realization of the agreement's full benefits, such as increased trade, investment, and free movement of capital. The harmonization of trade systems and the reduction of trade barriers are crucial aspects of the AfCFTA. While Rwanda is poised to benefit from reduced tariffs and streamlined logistics, Markus cautioned that achieving full implementation across all participating countries may take time. Despite the challenges ahead, Rwanda's eagerness to engage in intra-African trade sets a positive example for other nations looking to leverage the AfCFTA for economic growth. Markus also discussed the political landscape in Uganda, where President Yoweri Museveni has been reelected for a sixth term. While Museveni's continuity in office could provide stability for growth policies, concerns remain about election tensions and governance issues. Absa's outlook for Uganda remains cautiously optimistic, with expectations of a 5% growth rate in the near future. The country's efforts to control the spread of COVID-19 and secure support from development partners are seen as key drivers of economic recovery. As Uganda navigates current challenges, including inflation and political uncertainties, Markus emphasized the importance of maintaining a coherent policy framework to sustain growth. Despite the complexities of the regional economic landscape, Markus stressed the potential for African nations to harness opportunities like the AfCFTA to drive sustainable development and strengthen regional cooperation. The path ahead may be challenging, but with strategic planning and collaborative efforts, African countries can work towards a more integrated and prosperous future.