African free trade bloc comes into effect after Covid delays

African countries officially began trading under a new continent-wide free trade area on Friday, after months of delays caused by the global coronavirus pandemic.

But experts see the New Year’s launch as largely symbolic with a deal expected to take years to fully implement.

The African Continental Free Trade Area (AfCFTA) aims to bring together 1.3 billion people in a $ 3.4 trillion economic bloc that will be the largest free trade area since the establishment of the World Organization. trade.

Proponents say it will boost trade among African neighbors while allowing the continent to develop its own value chains. The World Bank estimates that it could lift tens of millions of people out of poverty by 2035.

“A new Africa is emerging with a sense of urgency and purpose and an aspiration to become self-reliant,” Ghana President Nana Akufo-Addo said at an online launch ceremony.

But obstacles – ranging from pervasive red tape and poor infrastructure to entrenched protectionism of some of its members – must be overcome if the bloc is to reach its full potential.

Covid-19 issues
Trade under the AfCFTA was scheduled to launch on July 1, but was pushed back after Covid-19 made face-to-face negotiations impossible.

However, the pandemic has also given additional momentum to the process, said Wamkele Mene, Secretary General of the AfCFTA Secretariat.

“COVID-19 has demonstrated that Africa is too dependent on the export of commodities, too dependent on global supply chains,” he said. “When global supply chains are disrupted, we know Africa suffers.”

All African countries except Eritrea have signed the AfCFTA framework agreement and 34 have ratified it.

But observers such as W Gyude Moore – a former Liberian minister who is now a senior fellow at the Center for Global Development – say the real work is starting now.

“I would be surprised if they could put everything in place within 24 months,” he told Reuters. “To be successful in the long term, I think we’ll have to look at how long it took Europe. This is a decades-long process. “

Historic challenges, including poor road and rail links in Africa, political turmoil, excessive border bureaucracy and petty corruption will not go away overnight.

And an annex to the agreement outlining rules of origin – a critical step in determining which products may be subject to tariffs and duties – has yet to be completed.

At the same time, 41 of the 54 member states in the zone submitted tariff reduction schedules.

Members are to eliminate 90% of tariff lines – over five years for more advanced economies or 10 years for less developed countries. Another 7% deemed sensitive will have more time, while 3% will be allowed to be placed on an exclusion list.