History has been recorded in Africa as 44 countries yesterday signed a unified Continental Free Trade Agreement that will pave way for a liberalized market for goods and services across the continent.
The Continental Free Trade Area (CFTA) to expand intra-continental trade and boost global competitiveness was signed during the 10th ordinary session held in the Rwandan capital, Kigali.
Out of the 54 countries in the continent, 44 sealed the deal of which 19 Heads of states were present with some prime ministers and government representatives signing for their respective countries.
This trade deal gives birth to the worlds largest free trade since the 1995 World Trade Organization. The unified trade ensures that all African Union countries involved would share in the welfare gains estimated to be about 2.64 percent of the continental GDP of $65 billion in 2018.
According to the Rwandan president and president of the African Union, Paul Kagame, “this agreement is about trade in goods and services. These are the kinds of complex products that drive high income.”
At the dying minute, Nigeria’s President Muhammadu Buhari canceled his trip to Rwanda and confirmed that Nigeria will not sign the deal, saying the trade agreement must fairly and equitably represent the interest of Nigeria and her African brothers.
South African President, Cyril Ramaphosa, said “We are part of this process of opening up Africa for trade. All that is holding us back from signing the actual agreement is our own consultation process. We still need to consult at home, to consult in Cabinet, to consult the partners at the National Economic Development and Labour Council Nedlac, and finally to consult Parliamentarians.” Adding that the country is going through a cleaning up process to ensure everyone is on board.
The refusal of Africa’s big economies, Nigeria and South Africa from signing the deal would have a significant impact on the trade agreement as both countries make up half of the African continent’s Gross Domestic Product. Nigeria is Africa’s biggest economy, while South Africa is the most industrialized economy in the continent.
In a statement, an analyst Alpha Sy said, “if Nigeria does not join, it will have an impact definitely. Nigeria is 190 million population country, it’s a large economy. So we hope that Nigeria will not pull out of it.”
Still hopeful that Nigeria’s decision not to sign the agreement is just a step backward and not a total withdrawal, Alpha also said,“Nigeria had already been part of the process of building it, we think it’s just maybe one step back that they are taking to review.”
Currently, Intra-Africa trade is about 16 percent of the continent’s total and a single unified market promises to increase Intra-African trade of the 1.2 billion Africans with a combined gross domestic product (GDP) of $2.5 trillion by almost 52.3 percent.
The other African countries that did not sign the trade deal are Botswana, Lesotho, Namibia, Zambia, Burundi, Eritrea, Benin, Sierra Leone and Guinea Bissau.