Is the Africa Trade Deal sinking?
It certainly looked like the future of Africa – one free market not haunted by excessive tariffs and regulations. However, the President of Nigeria Muhammadu Buhari had cancelled his trip to Kigali, Rwanda, for the signing of the agreement framework, despite the fact that other 44 countries were participating. His reasoning was that certain key stakeholders, such as trade unions and large business owners, were not consulted and the President may have feared the impact on his popularity at home.
But Mr. Buhari was not alone. Both of the two biggest economies in Africa, Nigeria and South Africa, were conspicuously absent, as were nine other countries. Despite that, over 40 other leaders signed a deal to create one of the world’s largest free trade blocs. It would also need to be ratified by all the signatories’ national parliaments before the bloc becomes a reality. Others staying out of the bloc were Botswana, Lesotho, Namibia, Zambia, Burundi, Eritrea, Benin, Sierra Leone and Guinea Bissau.
South Africa President Cyril Ramaphosa said he would sign once necessary legal processes were done. “President Ramaphosa has undertaken that South Africa will become a signatory to the agreement once the legal and other instruments associated with (the trade bloc) are processed and ratified by South African stakeholders and parliament,” the presidency said in a statement. Ramaphosa said the new deal will “yield great benefits for all countries on the continent as well as big business, small companies and micro-traders.” Moody’s said South Africa, Kenya and Egypt were most likely to really benefit “thanks to their large manufacturing bases and relatively robust infrastructure, particularly given their access to electricity.”
It is hoped the deal would come into force within six months, and increase prosperity for 1.2 billion Africans. The African Continental Free Trade Area (AfCFTA) would remove barriers to trade, like tariffs and import quotas, allowing the free flow of goods and services between its members.