APPRAISAL OF TRADE AND BUSINESS IN AFRICA AFTER SIGNING OF AFRICA CONTINENTAL FREE TRADE AREA AGREEMENT (AfCFTA).

On 21st March 2018, leaders from the 44 nations inked the African Continental Free Trade Area (AfCFTA) pact at the Extraordinary African Union (AU) Meeting which was held in Kigali, Rwanda. A group of forty-four (44) African Statesmen decisions was a milestone achievement, considering that only twenty-two 22 signatories were needed to give life to the draft agreement, however only forty-four (44) out of fifty-five (55) member nations of the African Union signed the agreement, living out continent’s two largest economies (South Africa, Nigeria).The Continental Free Trade Area is a continental geographic zone where goods and services are supposed to move from one jurisdiction to the other with no restrictions among member states.

The agreement has been tailored to ensure that it is not in contravention of any international trade rules as well as is compatible to existing trade agreements in the eight (8) regional economic zones.

COMMENCEMENT OF THIS AGREEMENT

This agreement will come into effect thirty (30) days after ratification by the parliaments of at least twenty-two (22) countries. Each country has one hundred and twenty (120) days after signing the framework to ratify.

THE AGREEMENT FOSTERS THE FOLLOWING

Once the free trade area is established there shall be no administrative barriers at any country’s borders in regard to movement of goods and services and the ambition is to take further steps that are similar to that of European Union (EU) creation like a customs union, a common market and even a single currency.

The same will help to create single continental market for goods and services.

Free movement of business persons and investments.

Expand intra African trade through better harmonization and coordination of trade liberalization and facilitation regimes and instruments across Regional economic communities and across Africa in general.

Resolve the challenges of multiple and overlapping memberships and expedite the regional and continental integration processes.

CONCLUSION

The rationale is to enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better relocation of resources.

Once this is implemented, this will be one of the world’s largest free-trade area in terms of the number of countries, covering more than 1.2 Billion people and over U$4 trillion in combined consumer and business spending if all 55 countries join the free trade area.

FURTHER INFORMATION:

This editorial is intended to give you a general over view of the Law. If you would like further information on any issue raised in this column, please contact.

Patrick Sanga 
Partner
E: p.sanga@vemmaattorneys.co.tz
M: +255 686 999 993

Bernard Nkwabi
Legal Officer
E: b.nkwabi@vemmaattorneys.co.tz
M: +255 653 374 414