Jubilation, hope as AU leaders sign ambitious trade treaty

Rwanda's President Paul Kagame signs the agreement for establishing the African Continental Free Trade Area during the AU summit in Kigali on March 21, 2018. PHOTO | AFP

What you need to know:

  • Nigerian and Ugandan leaders fail to attend crucial summit.
  • continent single market of 1.2 billion people will have a cumulative GDP of more than $3.4 trillion.

After months of seemingly endless political crises in all corners of Africa, the focus this week shifted to matters of economic development.

For a change, the continent had reason to smile when more than 40 African leaders signed the long-awaited Continental Free Trade Area Agreement in Kigali on Wednesday.

The signing took place during an African Union Extraordinary Summit that was mooted and agreed on during the ordinary session of the AU Assembly in Addis Ababa in January.

EXPANSION

The idea of establishing a single liberalised market for trade in goods and services is, however, not new, considering that AU decided to go ahead with the treaty as far back as 2012.

The widespread jubilation in Kigali was justified, given that the ambitious trade expansion and integration concept is aimed at enabling Africans to do business and move freely across the continent.

The CFTA launch is one of the flagship projects of Agenda 2063, alongside other key initiatives such as the Single African Air Transport Market, the Protocol on Free Movement of Persons and the African Passport.

While 44 out of the 55 AU members signed the agreement, some 27 countries also signed the Protocol on Free Movement of Persons and the African Passport.

STAYED AWAY

Regrettably, though, countries such as Nigeria, the continent's largest economy, failed to sign the CFTA deal, citing reservations on the treaty amid criticism of their harbouring protectionist policies.

Uganda's President Yoweri Museveni stayed away but his reasons for doing so remained unclear.

Capturing the spirit of the occasion, AU Commission chairman Moussa Faki Mahamat decried the fact that even after decades of independence, Africa was still in economic doldrums.

SELF-RELIANCE

He said the continent was still dogged by persistent under-development, and had been relegated to a marginal place in the international system.

Addressing heads of state and government at the signing ceremony, the AU Commission boss said it was about time the continent embarked on a path of cooperation and self-reliance.

"Our peoples, our business community and our youth, in particular, cannot wait any longer to see the lifting of the barriers that divide our continent,” he said.

BARRIERS

The AU Commission boss further said such barriers hindered Africa’s economic take-off and perpetuated misery, “even though Africa is abundantly endowed with wealth”.

As if to underscore the extent of the woes prevalent in many African countries, a combined United Nations and European Union report on levels of world hunger painted a grim picture for the continent.

FOOD CRISES

For instance the report, which was released on Thursday, listed Nigeria, Somalia and South Sudan as being among the countries that faced the worst food crises in 2017.

The report also pointed out that conflict and insecurity were likely to "remain major drivers of food security crises in 2018” that are likely to affect several African countries.

AMBITIOUS

Among the conflict zones in danger of facing serious food insecurity are the Central African Republic, South Sudan, the Democratic Republic of Congo and Libya.

Other regions expected to face hunger are northeast Nigeria, Lake Chad and the central Sahel, comprising Mali and Niger.

The signing of the new trade pact in Kigali was an extremely ambitious event, with a continental undertaking which if successful is capable of creating the world’s largest single market.

TARIFFS

Indeed if the pact effectively takes off, it will vastly boost intra-Africa trade by making the continent a single market of 1.2 billion people, and one with a cumulative Gross Domestic Product of more than $3.4 trillion.

Experts say the agreement is the most wide-ranging one in economic terms since the creation of the World Trade Organisation.

Specifically, the CFTA pact commits governments to remove tariffs on 90 per cent of goods produced within the continent, amid plans to phase out the levy in the future.

Jubilation about the Kigali treaty aside, the continental electoral calendar continues to unfold, with forthcoming presidential polls in Egypt and Sierra Leone.

RUNOFF

Egypt’s presidential poll will be held over three days between March 26 and 28, and is more or less guaranteed to return current president Abdel Fattah al-Sisi for a second term.

Sierra Leone, on the other hand, is expected to hold a presidential runoff on Tuesday despite efforts by the ruling All People's Congress to stop it.

The showdown will be between first round winner Brigadier Julius Maada Bio of the opposition Sierra Leone People's Party and the ruling party’s candidate, Samura Kamara, who was a close second.