Africa free trade agreement hailed as a dream come true by Presidency

The office of the President of South Africa has released a statement describing the Africa Continental Free Trade Area Agreement (AfCFTA) as the realisation of a dream started 60 years ago by the founders of the African Union.

Following Nigeria’s announcement to sign the agreement, AfCFTA was officially launched by African leaders at a summit in Niger over the weekend.

Nigeria was one of the last signatories of the deal, sighting concerns of the impact it could have on Nigerian businesses. This is of special concern to them as they have just recently been implementing steps to reinvigorate the local industry, so were wary of the impact allowing goods from other countries easy access into the country.

Africa free trade agreement benefits

The deal will see the removal of the vast majority of tariffs and taxes placed on goods being traded between signatories of the agreement in order to create a dominant hub of economic activity in Africa.

According to the Presidency, Ramaphosa believes AfCFTA will be a huge boon to African economies and he expects it create as-yet unseen growth and opportunity to the continent.

He is also confident that South African will be a major beneficiary of the arrangement that brings together 55 countries, 1.2 billion people and around $45 trillion worth of gross domestic product.

“The President sees the implementation of the agreement as a platform for African countries to trade among themselves and reaps the benefits of the tariff-free area,” the President’s office said.

“One of the key spin-offs is expected to be greater focus and urgency for infrastructure development across the continent to support economic activities.”

More than just economic benefits

Ipeleng Mkhari, the CEO and founder of Motseng Investment Holdings, gave the keynote address at the RICS summit and is confident AfCFTA would be the cause of rapid growth across Africa.

“At enterprise level, it will provide opportunities for scaled production, continental markets, access and better allocation of resources – not least of all capital, finance, and labour. Trade is key, but harmonisation is paramount,” she said.

“There’s an urgent need for open skies as current air movement is expensive and inefficient in Africa. We need open borders for a smooth marketplace. Also, more work is needed around harmonising investment and prudential guidelines.”