What to make of the African Continental Free Trade Area known as AfCTA

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Some 50 heads of state gathered in Niamey, the capital of Niger on July 7, 2019, for the African Union Extraordinary Summit on creating the AfCTA, the African Continental Free Trade Area. The concept is to increase intra-regional trade within the continent, and reduce the extreme outward-oriented economic relations.

In the works for years, the trade pact has been signed by 54 of 55 nations in the African Union. Eritrea is the only country still holding out of the agreement.

The Summit’s agenda was expected to include where to locate the new trade zone’s headquarters, with five countries cited as top contenders: Egypt, Ghana, Kenya, Madagascar, and Eswatini.

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Continental trade patterns under the ongoing colonial legacy are such that only some 15% of trade within Africa is among African nations, as opposed to nearly 60% in Asia, according to rough metrics from the African Export-Import Bank. Another metric shows that of all African nations’ exports, only 16% are intra-African, which is up from the 1980 low level of only 5%, but still lower than intra-regional trade in Europe or Asia.

Lowering tariffs and other barriers to trade among African nations can improve this picture, to the benefit of uplifting the productive economy all around.

While there are grounds for apprehension that the lowered trade barriers could be misused to pipe in and dump cheap goods through certain African nations, to the harm of their African trading partners, it can be averted through the leadership of the AU and national and regional officials.

Nigerian President Muhammadu Buhari has addressed the challenge directly, after holding back from supporting AfCTA until now. July 3 Twitter posts from the Office of the Nigerian Presidency stated, “President Buhari made it clear that [the] Nigerian government will be seeking to include terms that engender the development of policies that promote African production, among other benefits.” Buhari said, in his own words, “Africa, therefore, needs not only a trade policy, but also a continental manufacturing agenda. Our vision for intra-African trade is for the free movement of ‘made in Africa goods.’ ”

In addition, the win-win side of intra-African trade will be promoted by the advancement of the Belt and Road Initiative with China, and the Russia-China economic collaboration, now gathering force.

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Today News Africa
Today News Africahttps://todaynewsafrica.com
Today News Africa is a US-based international news organization focused on US-Africa policy and breaking news. Our goal is to provide truthful and exclusive stories to a diverse audience across North America and the African Continent. Subscribe to our news page at https://todaynewsafrica.com/ and Follow us on Twitter @todaynewsafrica

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