Postpone July 1 trading date for AfCFTA—CUTS International urges AU



CUTS International, a research and public policy think tank has called on the African Union to defer, for one year, the July 1 date for the commencement of trading under the African Continental Free Trade Area (AfCFTA).

“In the light of the global pandemic and what is happening across the world and the continent, it is no longer feasible for the trading to commence under the agreement on July 1 this year, as initially planned. With the closure of most land and sea borders, as well as airports, it would be difficult for people and goods to move freely within the context of the agreement,” said Mr Appiah Kusi Adomako, the West Africa Regional Director of CUTS International.

Speaking before a cross section of the media in Accra, Mr Adomako stated that “it is undeniable that the virus has already taken a significant toll on lives and the economies across the continent. Projected revenue for African government has been hard hit and majority of businesses are not in a good shape to take advantage of the agreement.”

Mr Adomako said postponing the planned date for at least six months would allow countries and businesses to recover from the COVID-19 pandemic. The proposed postponement is premised on the hope that the infection curve would be flattened by the third quarter of this year and the possibility of the availability of a vaccine for COVID-19 early next year. If we decide to stick to the July 1 date, some countries would use the virus outbreak as a pretext to close their national borders to goods and services, since goods and services cannot move without people.”

He was hopeful that the postponement of the date would allow for the unfinished agenda on the protocols on goods to be completed. 

This he said would also permit the Secretariat, which is headquartered in Accra, Ghana, to be fully set up in terms of personnel and staff. The postponement should not affect the commencement date for the second phase of negotiation on intellectual property, competition policy and investment.

The AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than US$3.4 trillion. 

In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organisation. Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 per cent by eliminating import duties, and to double this trade if non-tariff barriers are also reduced.

The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union. 

It will also expand intra-African trade through better harmonisation and coordination of trade liberalisation and facilitation and instruments across the RECs and across Africa in general. 

The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.

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