Study lists steps to make AfCFTA work
By Nsikan Ikpe
A study conducted by three experts, Mattias Hedwall, Wildu du Plessis and Virusha Subbanduo has listed steps to make the African Continental Free Trade Agreement, AfCFTA work.
According to the researchers, the critical key to unlocking AfCFTA’s $3-trillion trade growth potential rests heavily on expanding in-continent manufacturing activity.
According to them, fully implemented, AfCFTA ‘will unlock significant but uneven growth opportunities on the continent.’
In practical terms, they note, ‘countries with good trade integration and open economies are most likely to benefit economically from lower trade tariffs. However, numerous obstacles mean the tangible benefits of the agreement will probably be realised only from 2030.’
One of the firmly placed leaders in this light is the Republic of South Africa which would clearly be leveraging on ‘its existing strong connections across the continent and well-established manufacturing base.’
Other than South Africa, the experts also note that the two West African nations of Ghana and Côte d’Ivoire, also stand to tap the gains of the agreement on account of their relatively open economies, good state of infrastructure and supportive business environments.
Commenting on the impact that the regional economic communities, RECs have played in the pre-AfCFTA era, the study notes that ‘some such regional bodies have successfully encouraged effective trade among member countries. For example, Côte d’Ivoire, Kenya, Morocco, Senegal and SA have become regional trading hubs, having leveraged alliances they established through their regional communities.’ It counsels that lessons be drawn from these examples.
Hedwall is head of Baker McKenzie’s global international commercial & trade group while Du Plessis is head of Africa. On his part, Subban is a partner specialising in customs and trade at Baker McKenzie’s Johannesburg office.
Vera Songwe, UN-ECA Chief