Is trading under the AfCFTA on track?

The African Continental Free Trade Area (AfCFTA) holds immense promise for the continent's economic growth and development. As negotiations on protocols continue, there is a crucial need to assess if the implementation of the trade agreement is on track. Prudence Sebahizi, the Chief Technical Advisor on AfCFTA and Head of Negotiations Support Unit at the AfCFTA Secretariat, provided insights on the current status of the AfCFTA in a recent interview with CNBC Africa. The successful implementation of AfCFTA is essential for Africa's recovery and renewal, particularly in the wake of the challenges posed by the global pandemic. Phase one negotiations, which focus on protocols related to trade in goods and services and dispute settlement, are slated to be concluded by the end of June 2021. With the ambitious goal of creating a single market encompassing 55 African countries with a combined GDP of $3.4 trillion, the AfCFTA aims to leverage the continent's resources and human capital for mutual economic benefit. Sebahizi emphasized the importance of private sector participation in driving the AfCFTA forward. He highlighted that the private sector's engagement and initiatives are crucial indicators of progress. The launch of trading under the AfCFTA on January 1, 2021, marked a significant milestone. However, despite the vast potential of the African market, only a few countries have fully implemented the agreement, with even fewer actively trading under the bloc. Countries like Rwanda, Ghana, and Tanzania have made strides in this direction, but there is still much to be done. Sebahizi acknowledged that the process of ratification and domestication of the AfCFTA agreement varies from country to country, leading to delays in full implementation. While eight countries have ratified the agreement and 54 have signed it, efforts are ongoing to bring all nations on board. Notably, Eritrea is yet to join the agreement, but there is optimism about its participation in the near future. Sebahizi underlined the critical role of political will in advancing the AfCFTA agenda. He expressed confidence that the increasing pressure from the private sector would incentivize governments to expedite their national processes. Furthermore, Sebahizi identified three key barriers hindering intra-continental trade in Africa. Firstly, tariff barriers pose a significant challenge, with an average tariff rate of 6.9% across the continent. The AfCFTA aims to gradually eliminate tariffs on 97% of products traded within Africa over the next five to ten years, promoting smoother trade flows. Secondly, non-tariff barriers, such as regulatory complexities and lengthy customs procedures, obstruct the free movement of goods and people within the continent. The AfCFTA seeks to harmonize regulations to streamline trade processes and enhance market access. Lastly, structural challenges like inadequate infrastructure require collective action from governments to address them. While macro-level interventions are essential, addressing regulatory and tariff barriers at the micro level is crucial for facilitating intra-continental trade. Despite the challenges ahead, the AfCFTA holds immense potential to transform Africa's economic landscape and foster regional integration. By overcoming barriers and fostering collaboration between governments and the private sector, Africa can harness the benefits of a unified market and propel its economic development.