AfCFTA implementation may drag till June 2020

Despite the ratification of the African Continental Free Trade Area (AfCFTA) Agreement by 22 countries, the delay by four countries in depositing their instruments, as well as other trade issues needed to be addressed before the deal becomes operational, may stall the implementation beyond the proposed date of July, 2019.

The AfCFTA is expected to enter into force 30 days after 22 instruments of ratification have been deposited with the Chairperson of the African Union Commission (AUC) – the designated depositary for this purpose.

Gambia became the 22nd African country to ratify the African Continental Free Trade Area agreement (AfCFTA), meaning the bill now has the minimum number of ratifications needed to come into effect.

Having met the minimum threshold of ratifications, the operational phase of the agreement will be launched in July this year at the Africa Union summit.

While meeting the minimum ratifications does not mean immediate commencement of implementation of the agreement, it is the penultimate step towards implementation.

The agreement is still subject to negotiations on a number of implementation aspects and modalities.

Among the key issues where negotiations are still needed include the rules of origin, non-tariff barriers, structure of implementation, schedule of concessions and tariff books.

Such agreements will determine tariffs applicable to goods and commitment by countries.

The Manufacturers Association of Nigeria (MAN), had insisted that the Federal Government specifies the protectionist mechanism to check influx of goods that may collapse domestic manufacturing.

The negotiations are a complex issue, as it involves multiple stakeholders over a range of issues. The process is expected to take up to one year before the agreement takes effect in June 2020.

The trade bloc spanning 49 countries with a combined GDP of $3 trillion, will facilitate inter-regional trade, boost growth and help to alleviate poverty, its supporters say.

The African Union Commissioner for Trade and Industry Albert Muchanga, tweeted: “Good news! The Parliament of The Gambia has APPROVED ratification of #AfCFTA Agreement making us meet the minimum threshold.

“The AfCFTA market is being born and is one step ready for launch of its operational phase in July this year.

The agreement, signed by 49 of the 55 African Union nations in March last year, will dodge a patchwork of trade regulations and tariffs that make intra-African commerce costly, time-consuming and cumbersome.

Its promotion of tariff-free movement of goods, people and services across the continent is also expected to favour SME’s, who account for 80% of Africa’s employment and 50% of its GDP, according to the World Bank.

But sceptics have pointed to the impending challenges of uniting countries with the greatest level of income disparity between them, under the umbrella of one trade bloc.

For example, over 50 percent of Africa’s cumulative GDP is contributed by Egypt, Nigeria and South Africa, while Africa’s six sovereign island nations collectively contribute just 1 percent.

The motion was brought before Gambia’s parliament by Lamin Jobe, Gambia’s trade minister who highlighted the trade benefits of deeper regional integration:

“This document will definitely serve as a take-off point to enhance the free movement of people, good and services.

“By using this there is a lot of advantages that we can gain from the implementation of this agreement,” he said.