Africa Free Trade Agreement 2020

Electronic payments are also working better and better. This contributes to the efficiency and therefore to the competitiveness of trade in Africa. After the Kigali summit, more signatures were added for the AfCFTA. At the African Union summit in Nouakchott on 1 July 2018, five other nations, including South Africa, joined the agreement. Kenya and Ghana were the first nations to ratify the agreement and file their ratifications on 10 May 2018. [2] Of the signatories, 22 had to ratify the agreement in order for it to enter into force, and it happened on 29 April 2019, when Sierra Leone and the Arab Democratic Republic of the Sahara ratified the agreement. [7] As a result, the agreement came into force 30 days later on 30 May 2019; At that time, only Benin, Nigeria and Eritrea had not signed. Outstanding issues, such as trade agreements and rules of origin, are still being negotiated. [when?] Successful implementation of AfCFTA would help mitigate the negative effects of COVID-19 on economic growth by supporting regional trade and value chains by reducing trade costs. In the longer term, AfCFTA would provide a path for integration and growth reforms for African countries.

By replacing the patchwork of regional agreements, streamlining border procedures and prioritizing trade reforms, AfCFTA could help African countries strengthen their resilience to future economic shocks. Implementation of the agreement would also result in higher wage increases for women (an increase of 10.5% by 2035) than for men (9.9%). It would also increase the wages of skilled and unskilled workers — 10.3% for unskilled workers and 9.8% for skilled workers. The reasons for this neglect of these neighbouring markets are quite clear and go beyond the usual considerations of low per capita income. On the one hand, Ethiopia has a fairly protectionist customs policy, with high levels of tariffs in some sectors. However, members of the East African Community (EAC) such as Kenya (not Ethiopia) currently apply a high external tariff on imports of Ethiopian products, although both countries are members of the Common Market for East and South Africa (COMESA) regional grouping. This is because Ethiopia has not yet joined the comesa and, therefore, relatively high tariffs are still applied to bilateral trade. A similar problem concerns trade between Rwanda and Uganda with the neighbouring Democratic Republic of Congo (DRC) — all members of COMESA, but the Democratic Republic of Congo has not yet joined the free trade agreement.

The report aims to help countries implement strategies that can maximize the potential benefits of the agreement while minimizing risks. Creating a continental market requires resolute efforts to reduce all business costs. This requires legislation that allows goods, capital and information to move freely and easily across borders. Countries that do so will be able to attract foreign investment and increase competition that can increase productivity and innovation for domestic firms. Governments must also prepare their workforce to use new opportunities with new measures to reduce the cost of job change. The launch of the African Continental Free Trade Area (AfCFTA) has been postponed due to coronavirus. Experts believe that the pandemic could help boost the ambitious free trade project. In 1963, the Organization of African Unity (OAU) was founded by the independent states of Africa.

The aim of the OAU was to promote cooperation between African states. The 1980 Lagos Action Plan was adopted by the organization. The plan proposed that Africa minimize its dependence on the West by encouraging intra-African trade. This began with the creation of a number of regional cooperation organisations in different regions of Africa, such as the Conference on the Coordination of Development of