Inherent challenges to AfCFTA must be addressed

Heads of African States of the African Union (AU) adopted at a special summit the African Continental Free Trade Area (AfCFTA) in Kigali, Rwanda, on March 21 this year (2018).

AfCFTA combines agreed protocols on certain aspects of Africa’s economic integration, and its essential thrust reflects the broad aspirations for continental economic integration.

However, the framework agreement contains many aspects over which African civil society and other stakeholders have expressed profound misgivings in the course negotiations over recent years. Key among these concerns has been the predominant focus of the AfCFTA on ambitious and aggressive elimination of tariffs and deregulation of services, with apparently minimal regard for the different needs and capacities of different countries and socio-economic constituencies in Africa.

Vice-President of the Association of Ghana Industries (AGI) Humphrey Ayim-Darke has opined that in view of AfCFTA, there is a need to build the capacity of industry and businesses in critical economic areas for the gains of AfCFTA to reflect in the economy.

Ayim-Darke, who heads the SME unit of AGI, is genuinely concerned about the low capacity of industries in the country and how effectively they can compete within AfCFTA. Additionally, given the low levels of revenue sources in the country, the AGI Vice-President is worried that a removal of tariffs on goods will restrict government’s revenue sources – and these are genuine concerns.

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An Africa-wide multi-stakeholder consultation on AfCFTA is currently being organised in Accra and ends on June 14. It is to be hosted by Third World Network-Africa (TWN) as part of interventions by members of the Africa Trade Network, and the concerns raised by the AGI have cropped up and are being debated at length.

The deliberations note that the focus on tariff and regulatory restrictions appears to be at the expense of serious and effective efforts to coordinate and integrate even minimal other measures related to productive capacity, infrastructure etc.

Note fully, the structures created for the AfCFTA have had little or no space for the involvement of civil society, the private sector and other social groups whose interests are implicated. The AGI’s position is a case in point, and we believe consultations should be deepened and extended.

We believe there should be more engagement at this critical stage of ratification, whereby 44 African states have signed onto the deal with four countries – namely Kenya, Ghana, Rwanda and Niger – ratifying the agreement, leaving only 18 countries to ratify and enable it to come into force early next year.

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