ADDIS ABABA, Mar 19 (Agencies): Africa's leaders will gather in Rwanda Wednesday to launch what they say will be the world's largest free trade area but Nigeria has already pulled out, highlighting the challenge in getting the continent to sign up.
However Muhammadu Buhari, president of one of Africa's largest markets Nigeria, this week cancelled plans to attend the Kigali launch and called for more consultations after business leaders objected to joining the world's biggest free trade area in terms of countries.
"The signature of the CFTA is something that makes Africa look good on paper, but for implementation it's going to have a lot of hiccups," said Sola Afolabi, a Nigeria-based international trade consultant.
Some 27 heads of state are expected to attend the Kigali meeting, but it is unclear who will sign on to the CFTA right away.
AU trade and industry commissioner Albert M. Muchanga said Africa's fledgling industries and growing middle class would benefit from the CFTA's removal of tariffs.
Currently, African countries only do about 16 per cent of their business with each other.
"If we remove customs and duties by 2022, the level of intra-African trade will increase by 60 per cent, which is very, very significant," Muchanga told AFP.
"Eventually, we are hoping that all the African Union states will be parties to the Continental Free Trade Area," he added.
With underdeveloped service and industrial sectors across the continent, African countries have for decades seen their fortunes rise and fall with the prices of exported commodities such as oil, cocoa and gold.
In recent years, nations like Ethiopia and Ghana have tried to wean themselves from this cycle by building factories and new infrastructure for local industries, spurring rapid growth.
Landry Signe, a development expert with Stanford University in the United States, said the agreement could help these industries, while giving African countries a unified platform to negotiate trade deals with wealthier nations.
"With the CFTA, the manufacturing sector would be much more diversified, as the market would not be a few million people, but potentially 1.2 billion people," he said.
South Africa, a vocal backer of the trade deal, has argued that African economies are too small to support economic diversification and industrialisation on their own.
Regional integration "is critical to reduce the vulnerability of African economies to global shocks, a vulnerability which results from their heavy reliance on commodities," South Africa's Trade and Industry Minister Rob Davies wrote in an editorial last week.
However in Nigeria, the plans have not gone down well with unions and business leaders.
Meanwhile, the AU is looking forward to work with China and other partners outside Africa as the continent focus on realizing the African Continental Free Trade
Area (AfCFTA), an AU official said Saturday.
The AU is expecting their continued support as it focuses on achieving economic prosperity for African citizens, Kwesi Quartey, deputy chairperson of the AU Commission, told Xinhua on the sidelines of the ongoing AU's extraordinary summit on the AfCFTA.
"China is one of the great partners of Africa in achieving rapid economic development on the continent," he said in Kigali, capital city of Rwanda.
African leaders are expected to sign an agreement to launch the AfCFTA at the summit, which will make Africa the largest free trade area created since the formation of the World Trade Organization, according to the AU. The AfCFTA could create an African market of over 1.2 billion people with a GDP of 2.5 trillion U.S. dollars, the pan-African bloc said.
"There is a political will and commitment in this agreement, we expect to amicably address any challenge that may arise during the implementation process," said Quartey.
The challenges could include protection of local industries, he said, adding that this would not be a big challenge since African leaders are committed to creating a single African market.
AU launches world's largest free trade area tomorrow
Expects cooperation with Beijing also
FE Team | Published: March 19, 2018 21:48:40
AU launches world's largest free trade area tomorrow
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