Africa on path to economic integration

Published: October 14,2024

By OTIATO OPALI 

Thirty African countries are set to join the guided trade initiative of the African Continental Free Trade Area, or AfCFTA, which is intended to assist countries that have ratified the agreement to conduct seamless trade. The initiative was launched in 2022, with eight countries putting in place measures to trade under its rules.

At the AfCFTA Biashara Afrika business forum held in Rwanda between Wednesday and Friday, WamkeleMene, secretary-general of the AfCFTA Secretariat, confirmed more African countries have met the conditions to join the framework.

“This year when we launched the second edition of the guided trade initiative, we co-opted 30 more countries which will be trading under the rules of the AfCFTA. What has had to happen within this two-year period since 2022 is that most countries were undertaking reforms, putting in place legislation and custom systems that will enable the trade to happen,” Menesaid.

The expansion of the guided trade initiative aligns with the broader objectives of the AfCFTA, which envisages a 53 percent increase in intra-African trade, transforming the continent into an attractive market with a potential consumer base of $1.3 trillion, according to International Monetary Fund estimates.

Mene also announced that the first disbursements of the AfCFTA Adjustment Fund are expected early next year.

The fund will support member states to adjust smoothly to the new liberalized and integrated trading environment established under the agreement by mitigating the potential adverse impacts of AfCFTA-induced tariff revenue losses. It will also help address the infrastructure deficits and supply chain bottlenecks to the implementation of the agreement.

Removing barriers

While addressing the forum on Wednesday, Paul Kagame, Rwanda’s president, said that African governments need to continue doing their part to create an enabling environment for business and removing non-tariff barriers while facilitating cross-border movement should remain a priority.

“The good news is that integration in Africa is ongoing, and already, we can see positive results. However, we can do more and we can go faster. Over 30 countries are now participating in the guided trade initiative. Rwanda is happy to be among the first countries to join this pilot,” Kagame said.

While discussing the challenges facing the implementation of the agreement with delegates, Gilbert Buregyeya, a founder of a tech innovation hub in Uganda, welcomed the participation of more countries while highlighting the impact of the political will of the African states in making the agreement operational.

“Several countries signed the agreement but have yet to ratify it. For businesses looking to expand and reach out to others, it is crucial for government officials to discuss the challenges hindering ratification and the implementation of the agreement,” Buregyeya said.

Since AfCFTA’s adoption in 2018, 54 African Union member states have signed the agreement, of which 47 have ratified it. With the potential to unlock a market of 1.4 billion people, the regional integration project is expected to significantly transform trade within the continent.

Chinadaily.com