The African Continental Free Trade Area (AfCFTA) could boost regional trade and industrialization, especially in East Africa. Effective implementation of the agreement signed last March in Kigali is now needed to unleash the potential of the region.

“Currently East African countries are trading amongst themselves at only half their potential, and the growing local demand is met by imports from outside the continent rather than by local production,” explained Andrew Mold, Acting Director of the ECA in Eastern Africa. “The AfCFTA will enable East African countries to increase their exports of manufactured goods in the region and on the continent.”

He was speaking at the opening session of the 22nd Meeting of the Intergovernmental Committee of Experts of the Sub-regional Office for Eastern Africa (ICE 2018), which is taking place this week in Kigali and focuses on the implementation of the AfCFTA.

While 49 countries on the continent have signed the Agreement establishing the AfCFTA, only 12 countries have ratified it so far. Negotiations are still ongoing about modalities on the liberalization of trade in good and services, the ECA providing technical support to member states in those phases of negotiations.

David Luke, Coordinator of the African Trade Policy Centre at ECA, insists: “The more ambitious the liberalization, the higher will be the gains in terms of increase in GDP and exports. However, we still need to win the hearts and minds of the private sector and civil society, who will be the true implementers of the AfCFTA”.

According to ECA analysis, smaller countries are those which will get the largest increase in intra-African exports – up to 68% increase for a country like Rwanda. On average, intra-African trade is expected to increase by 50% once the AfCFTA is implemented. Gains in welfare are also expected across the continent.

However, “challenges in terms of non-tariff barriers and restrictions on trade of some commodities need to be addressed to tap into the trade opportunities“ stressed Matia Kasaija, Minister of Finance, Planning & Economic Development of Uganda.

Rwanda’s Finance Minister calls on Africa to speedily ratify AfCFTA Agreement

During the opening session, Rwanda’s Rwanda’s Finance and Economic Planning Minister, Uzziel Ndagijimana, urged African countries to speedily ratify AfCFTA Agreement.

Mr. Ndajimana said the AfCFTA was crucial to Africa’s inclusive growth and prosperity hence the need for more countries to urgently ratify the agreement so it can go into force.

Forty-nine of Africa’s 55 countries have so far signed the agreement establishing a free trade area that is seen as vital to the continent's economic development. At least 22 member countries should ratify the agreement before it can be implemented. So far only 12 have ratified since signing the accord in March, two of them from East Africa.

“We were all very happy with the outcome of the AU Summit here in this building in March this year,” said Minister Ndajimana. “However, this is not enough. We need ratifications to move forward. Our efforts will come to nothing if we do not achieve 22 ratifications by March next year.”

He added that the theme of the meeting, “Implementing the African Continental Free Trade Area in Eastern Africa: From Vision to Action”, was timely, allowing governments in the region to meet with experts to discuss what the agreement means for both region and continent and build consensus on the way forward. The Minister said the AfCFTA symbolised ‘our progress toward the ideal of African unity’.

For her part, Economic Commission for Africa (ECA) Deputy Executive Secretary, Giovanie Biha, said for Africa to reach new horizons more collective efforts were needed.

“Countries must ratify the agreement, implement it, and put in place the necessary reforms to enable the economic transformation we are looking for,” she said.

Ms. Biha told delegates that the ECA was currently supporting member States in their efforts to make the AfCFTA a reality. “And we will be setting up national dialogues so that governments, civil society and the private sector can come together to discuss the way forward. Building a consensus behind the AfCFTA is the only way to achieve its implementation.”

The ICE 2018 is gathering more than 250 participants from the 14 countries covered by the subregional office. It aims at reaching a consensus on the way forward for the implementation of the AfCFTA, while fostering regional integration.

The meeting is focusing on discussing macroeconomic and social conditions in Eastern Africa; implementing the AfCFTA; trade facilitation, services trade, leveraging the AfCFTA for greater gender inequality, and the Protocol on the Free Movement of people.

High-level representatives of Eastern Africa member States, regional economic communities (RECs) and intergovernmental organizations are attending the meeting as well as private sector representatives, international institutions, civil society organisations, media, and other relevant stakeholders.

The 12 African countries that have ratified the AfCFTA are (in alphabetical order): Chad, Côte d’Ivoire, Ghana, Guinea, Kenya, Mali, Niger, Rwanda, Sierra Leone, South Africa, Swaziland and Uganda.