Fast to the starting line, slow out of the blocks

Lauded continent-wide free trade came into effect on 1 January, but very few countries were ready to trade.

- Peter Fabricius

the much-heralded African Continental Free Trade Area (AfCFTA) officially became operational on 1 January this year, with some fanfare. African countries, at least theoretically, began trading under the more favourable terms of the treaty on that day, marking the start of a new trading dispensation that should eventually create an immense single market of 54 countries, some 1.3bn people and a combined GDP of around $3.4tr.

Of the African Union’s (AU’s) 55 member states, only the reclusive nation of Eritrea in the Horn of Africa has not signed the AfCFTA and 34 countries have so far ratified it, a necessary step to implementation.

The clock is now ticking for countries, basically, to eliminate tariffs on 90% of goods over five years (ten years for least developed countries or LDCs) and on an additional 7% over the next five years (eight years for LDCs).

Africa’s ambitions for the AfCFTA are exceedingly large. It is pinning its hopes on it as the panacea for most of Africa’s many economic ills. President Cyril Ramaphosa, outgoing 2020 chairperson of the AU, said at a webinar on 1 January, to mark the implementation of the AfCFTA, that he believed it would kickstart industrialisation, tackle “extreme poverty, unemployment and inequality” and thereby unshackle “the stubborn legacy of colonialism”.

The World Bank seems to share these high hopes, estimating that if fully implemented, the AfCFTA would, by 2035, increase total exports by almost 29% and intracontinental exports by more than 81%.