Africa formally ratified the Free Trade Area (FTA) agreement at the beginning of the new year. As a result, trade on the continent will increase and poverty will decrease.
Despite several months of delays, the Free Trade Area (FTA) agreement finally came into effect in Africa on the first day of the new year, 2021. As a result, Africa is now the world’s largest free trade area.
In March 2020, the African Continental Free Trade Area (ACFTA) agreement was signed, which was to take effect on 1 July. But due to the Covid-19 overcrowding, negotiations between the members became difficult and the date of implementation of the agreement was postponed.
The main goal of the ACFTA is to bring 1.2 billion people across the African continent under one umbrella. If the FTA is implemented in all 55 African countries, trade between them will reach দাঁ 4 trillion. At present, the combined economy of the African continent is 3.4 trillion US dollars. Note that one trillion is equal to one lakh crore.
At present, only 16 percent of the total trade of African countries is among themselves. The Economic Commission for Africa (ECA) said the rate would exceed 50 percent if tariffs were lifted. Among other continents, Latin or South Africa accounted for 19 percent, Asia for 51 percent, North America for 54 percent, and Europe for 60 percent.
According to a World Bank estimate, the Free Trade Area (FTA) agreement will lift at least 10 million people out of poverty on the continent by 2035.
Speaking at the inaugural ceremony of the ACFTA on the online platform on Friday, Ghanaian President Nana Akufo-Addo said, “The journey to a new Africa has begun with a sense of new aspirations, goals, and aspirations to become self-reliant.”
However, in some countries, red tape has obstacles such as violence, infrastructural weaknesses, and conservatism. Therefore, to achieve the goal of making full use of trade potential, these obstacles have to be removed.
“Covid-19 has shown us how dependent Africa is on primary commodity exports and the global supply chain,” said Weikel, secretary-general of the ACFTA Secretariat. When the global supply chain was disrupted, we saw that Africa was shaking. ”
- Guide Moore, a fellow at the Center for Global Development (CGD) and former Liberian minister, thinks the real work on the trade deal has just begun. “I would be surprised to see that everything is fine in 24 months,” he told Reuters.
Historically, Africa is a continent plagued by poor road and rail communications, political instability, excessive bureaucratic complexities along borders, and corruption. These will not be cut overnight.
The question remains, however, as to whether Africa is still ready for free trade, once the treaty is in place. Because some issues that are very important for trade have not been addressed yet. Such as