CFTA: What an ambitious deal!

Last week, 44 African countries signed up to the African Continental Free Trade Area (CFTA) agreement, creating a single African market that will equally ease mobility of people across the continent.

The agreement’s vision is a free trade encompassing 1.2 billion people across the continent. This agreement would allow mainly the movement of goods and services, flowing freely in and out between African countries, which, of course, have subscribed to the agreement.

One of the likely potential benefits is to create tens of thousands of jobs and significantly reduce unemployment among the continent’s youthful population.

Importantly, it will boost trade between African countries and would be instrumental in moving the whole continent away from the narrative of simply being a place where the so-called economic powerhouses of the West and East come to get raw materials.

Under the trade deal, all signatories would have to agree to reduce the trade tariffs and import quotas between each other and boost intra-African trade.

This agreement, in my view, has been long overdue. Drawing a lesson from other regional trade arrangements, especially in Europe and America, the African deal is quite an ambitious one.

This agreement is, arguably, in line with Africa’s commitment to be self-reliant. In other words, intra-African trade deal demonstrates the African changing mindset to effectively and efficiently manage matters that affect the continent without relying on the West.

It indeed reflects Africa’s willingness to emancipate itself from things that have long been keeping the continent in a peripheral posture.

It is Africans themselves to make bold and robust decisions to change the continent’s posture and narrative regardless of pessimism and negativism of some Africans or non-Africans.

The African Continental Free Trade Area is similar to the European Single Market, which seeks to guarantee the free movement of goods, capital, services, and labour within the 28 EU member states.

It is equally similar to the Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada; North American Free Trade Agreement (NAFTA) between the United States and Canada (also known as ‘the U.S.-Canada Free Trade Agreement’); and Mercosur Free Trade Agreement between the Argentine Republic, the Federal Republic of Brazil, the Republic of Paraguay and the Eastern Republic of Uruguay.

It specifically covers the free movement of goods, services and factors of production between countries through, inter alia, the elimination of customs duties and non-tariff restrictions on the movement of goods, and any other equivalent measures.

So, CFTA isn’t a unique trade deal but a reflection of Africa’s ambitious initiative to leverage the power of business to drive Africa’s integration. In fact, it cements African unity.

Besides, the CFTA is a legal protection which is an important principle and an indispensable guarantee for signatories. However, CFTA doesn’t intend to reduce the barriers to trade between two or more countries, which are already in existence to help protect local markets and industries.

For example, the East African Community (EAC) already adopted the Common Market Protocol that provides four freedoms within the region, inter alia, free movement of goods, labour, services and capital. For the purpose of enhancing integration, the Common Market Protocol enhances intra-regional trade.

To ease implementation and co-ordination, the parliaments of the all the signatory countries need to ratify CFTA. Given that signatories have literally expressed the willingness to adhere to the agreement, they must equally put in place implementation mechanisms.

The African Free Trade Area is a big task and, in a way, a sense of obligation. It is one of the monumental steps taken toward greater economic ties and trade within Africa. Its benefits to the continent’s citizens will depend on the enduring enthusiasm, focus and determination of the leaders to live up the deal.

On the face of CFTA, it will have a positive impact on African citizens. For the individual citizens to be supportive of the trade deal, there’s a need for awareness-raising so as to conceive its economic benefits.

They need to understand that this trade deal expands the total market size of member states. Once many nations engage in free trade it opens opportunities for their citizens to have enough economic resources or consumer goods for meeting various needs or wants.

Greater product quality means improved satisfaction for consumers. In addition, consumers will have access to a wider variety of products and services.

CFTA is likely to increase the quality of life for citizens when they take advantage of it. Free trade allows the lowest-priced goods to enter the marketplace. Low consumer prices usually help individuals increase their purchasing power.

Not only does trade deal increase an individual’s quality of life, it also generates higher national economic growth through increased consumer purchases.

It is an inevitable part of the world in the 21st century that we cannot turn our back on international trade. It, however, calls for the African leaders to prioritise initiatives to open economy markets so that African companies can sell more of their goods and services across the continent.

The trade deal will make Africa’s economy open, dynamic, and competitive, and would help ensure that Africa is one of the best places in the world for doing business.

The writer is a law expert.

Follow The New Times on Google News