African Continental Free Trade Area
The AFCFTA agreement was signed in March 2018 by52 membercountries out of 55. Three countries did not sign the agreement these were; Eritrea, Nigeria and Tanzania. This agreement will come into force once 22 countries ratify. By end of February 2019, there were 15 countries (Ghana, Kenya, Rwanda, Niger, Chad, Congo Republic, Djibouti, Guinea, eSwatini (former Swaziland), Mali, Mauritania, Namibia, South Africa, Uganda, Ivory Coast (Côte d’Ivoire) had deposited their instrumentsof ratificationwith the African Union and 4 countries (Sierra Leone, Senegal, Togo, and Egypt) had parliamentary approval making a total of 19. This progress isexpected to put the AFCFTA into force before July 2019.
The African Continental Free Trade Area (AfCFTA) will cover a market of 1.2 billion people and a gross domestic product (GDP) of $2.5 trillion, across all 55 member States of the African Union. In terms of numbers of participating countries, AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization.
It is also a highly dynamic market. The population of Africa is projected to reach 2.5 billion by 2050, at which point it will comprise 26 per cent of what is projected to be the world’s working age population, with an economy that is estimated to grow twice as rapidly as that of the developed world.
With average tariffs of 6.1 per cent, businesses currently face higher tariffs when they export within Africa than when they export outside it. AfCFTA will progressively eliminate tariffs on intra-African trade, making it easier for African businesses to trade within the continent and cater to and benefit from the growing African market.
Consolidating this continent into one trade area provides great opportunities for trading enterprises, businesses and consumers across Africa and the chance to support sustainable development in the world’s least developed region. ECA estimates that 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.
Chinese inspectors are set to visit Nairobi this month for certification checks on agricultural produce, putting Kenya on the path to fresh produce export to the expansive Asian market.
Nairobi and Beijing last November inked a Sanitary and Phytosanitary (SPS) deal which will see Kenyan exporters sell their farm produce to the populous China upon meeting set health standards and requirements.
The agreement, which followed week-long intense negotiations in Shanghai during the inaugural China International Import Expo, covered more than a dozen of fresh produce where Nairobi has traditionally relied on Europe for market.
“We have a team coming in from China on March 27 for the final certification of our produce and then we are good to go,” JaswinderBedi, chairman of state-run Export Promotion Council (EPC), said by telephone.
“We will start seeing a difference (growth in exports) because market expansion is now happening. It takes time to negotiate with some of these countries because they use technical barriers of trade to stop your exports.”
They include cut flowers, vegetables, avocados, French beans, legumes (such as peas, beans and green grams), herbs, mangoes, peanuts and macadamia.
Other produce in line for sale in Chinese markets are meat, hides and skins, bixa, gum arabica and myrr as well as Asian vegetables such as chilli and karela, according to a November statement by State House’s press office.