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17.08.2020 Feature Article

African Continental Free Trade - A Post-Covid 19 Blessing

African Continental Free Trade - A Post-Covid 19 Blessing
LISTEN AUG 17, 2020

The president of Ghana, Nana Addo Danquah Akufo-Addo, inaugurated the handing over of the building housing the secretariat of the African Continental Free Trade Area (AfCFTA) to African Union (AU) on Monday’ 17 August 2020. What role is AfCFTA going to play in the era of Covid 19 and beyond?

Coronavirus Pandemic, popularly know as Covid 19, has created havoc in the world since the first coronavirus cluster was reported in Wuhan, China on 31 December 2019. As at August 17, 2020, the virus has killed 773,586 people worldwide and infested 21,852,241. The pandemic has affected 213 countries and territories around the world and 2 international conveyances.

Many families have lost their loved ones to Covid 19, many people have lost their means of income and livelihood, the economies of the world have shrunk and there is undoubtedly an impending economic recession that is going to affect how people live.

But despite all the curses of Covid 19, there are numerous blessings that would also make the people of the world have healthier lives, the economies of nations stronger, cause global businesses to adapt better standards and better improve personal lives than before the outbreak of the pandemic.

Many have learnt to observe personal hygiene, such as regular washing of hands and washing of things they put into their mouths, regular cleansing of their bodies and their environments. These hygienic practices have reduced common and fatal sicknesses such as common cold, flu, watery eye, running stomach and stomach upsets, diarrhea, cholera and malaria.

Apart from higher awareness and consciousness of global hygiene, awareness of people to wash their hands regularly and washing of things they put into their mouths, clean their homes and persons and environment, there has also been a global awareness of nutrition, what people eat and drink to keep their immune system strong.

People are more conscious of what they eat and drink than ever before, many have adapted to nutritions which are not only boosting their immune system, but also supplying the minerals and substances vital to their lives and rejecting food and drinks that are high in unhealthy cabs, meat, sugar, fat, unhealthy oils and salt and are eating more vegetables, fiber, fruits, seafoods and fishes, lean meat and healthy oils.

Many have reduced alcohol consumption and that of soda drinks and increased water drinking, reduced their body weight by cutting down calories intake, cut long distance travels and began to enjoy holidays at their backyards, locality and regions, and now have more time for themselves and their families more than ever before.

These would at the end help reduce known diseases in the globe such as diabetes, hypertension, strokes, heart diseases, cancer and reduce spread of others such gastrointestinal diseases, cholera, diarrhea and malaria.

Obesity is a global health problem, Many people in the world are obese. Obesity is a medical condition in which excess body fat has accumulated to the extent that it may have an adverse effect on the health of the individual. It may be hereditary, but it is generally caused by eating too much and moving too little. If one consumes high amounts of calories, particularly fat and sugars, and does not burn off the excess energy through exercises and physical activities such as walking for at least half an hour a day or perform energy consuming tasks such as jobbing and sport, but doing nothing, only sleeping and watching television on the sofa or playing with smart phones and computer, the one becomes obese.

Apart from better global health as a result of Covid 19, the global economies would be stronger after the period of depression and recession, especially the third world countries. This is not going to come if the third world countries still maintain their sleeping state. But they stand a better chance to awaken now.

Every country, region and block in the word are now caring for their people and economy, and their care for others have shrunk. Everyone is for oneself now. This has provoked the third world countries to do something for themselves, as they see the world become a place for protectionism.

This protectionism approach is expected to benefit countries of Africa, but more work and economic Inteligence and regional commercial cooperation are extremely important if the continent of Africa is going to survive and come out stronger after Covid 19 era.

It appeared Africa was preparing for something like that when it rectified the African Continental Free Trade Area (AfCTA) on March 22, 2018, two years before the global outbreak of Covid 19 in the first quarter of 2020. The AfCTA is the largest regional trade agreement in the world in terms of the number of participating countries since the formation of the World Trade Organization.

The agreement was brokered by the African Union (AU) and was signed on by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018. The agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent. The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent by 2022. The proposal was set to come into force 30 days after ratification by 22 of the signatory states.

At 2012 submit of African Union in Addis Ababa, the leaders agreed to create a new Continental Free Trade Area by 2017. At the 2015 AU summit in Johannesburg, the summit agreed to commence negotiations. This began a series of negotiations for over three years. The first negotiation was held in February 2016 and eight more meetings until the Summit in March 2018 in Kigali. From February 2017 on the technical working groups held four meetings, where technical issues were discussed and implemented in the draft. On March 8–9, 2018 the African Union Ministers of Trade approved the draft.

As of July 2019, 54 of the 55 African Union states had signed the agreement, with Eritrea the only country not signing the agreement. Of these member states 27 have deposited their instrument of ratification. Eritrea was not signing die to its conflict with Ethiopia. But following the 2018 Eritrea–Ethiopia summit, the AU Commissioner for Trade and Industry now expects Eritrea to sign the agreement.

The African Continental Free Trade Area did not come into effect until 22 of the signing countries ratified the agreement, which occurred in April 2019 when The Gambia became the 22nd country to ratify it. As of December 2019, 28 countries have ratified and deposited their documents, Morocco has rectified, but yet to deposit it.

Nigerian, the largest economy and the most populated country in Africa, signed the AfCFTA agreement on 7 July 2019 after a long consultation with local trade unions and manufacturers associations, who rose against the nation’s decision to sign the agreement.

At 200 million people, Nigeria is Africa's most populous country and has about the population of the second and third most-populous countries, Ethiopia and Egypt, combined, each of which have a population around 98 million. With a nominal GDP of US$376 billion, or around 17% of Africa's GDP, it is just ahead of South Africa, which accounts for 16% of Africa's economy. Because Nigeria is such a significant country in terms of its population and its economy, its absence at the initial signing of the agreement was particularly disturbing.

The Nigeria Labour Congress called the agreement a "renewed, extremely dangerous and radioactive neo-liberal policy initiative", suggesting increased economic pressure would pressure workers into migration under difficult and unsafe conditions.

The Manufacturers Association of Nigeria, which represents 3,000 Nigerian manufacturers, rallied for a decision to back out of the agreement. As 2018 drew to a close, former President Olusegun Obasanjo said the delay by Nigeria to sign the agreement was "regrettable", emphasizing the lack of trade in goods amongst African countries, the difficulties in travelling from one African country to another, and the colonial legacy which these restrictions on Africa's growth represented.

President of Nigeria Muhammadu Buhari was particularly reluctant to join if it hurt Nigerian entrepreneurship and industry. On July 7, 2019 Nigeria and Benin committed to signing the Africa free trade at the 12th extraordinary session of the assembly of the union on ACFTA; leaving Eritrea as the only nation out of the 55 African Union Member States not to sign up to the deal.

At the AU Executive Council 18th Extraordinary Session in Kigali, Rwanda in 2018, the AUC was tasked to “develop criteria that would ensure the setting up of an efficient AfCFTA Secretariat, which would in the interim be located within the Commission”.

Ghana was chosen to host the secretariat of AfCTA at the 12th AU Extraordinary Summit held in Niamey, the capital of Niger July 2019, after Ghana beat off competition from Egypt, Eswatini, Ethiopia, Kenya, Madagascar and Senegal. In his acceptance speech, during the close session of the Summit, the President, Nana Addo Dankwa Akufo-Addo, thanked the Assembly for the decision, stating that "it is a privilege that, for the first time in our nation's history, we have the responsibility of hosting an important pan-African institution."

President Akufo-Addo expressed his gratitude to President Macky Sall of Senegal for stepping down Senegal's candidature in favour of Ghana, and also showed his appreciation to the leaders of Egypt and Ethiopia, Abdel Fattah el-Sisi and Abiy Ahmed respectively, for similar gestures of solidarity.

Whilst applauding the member states that have deposited their instruments of ratification at the AU Commission Headquarters in Addis Ababa, the President expressed his delight at the decision taken by Nigeria to sign up to the Agreement, stressing that "the adhesion of Nigeria to the Free Trade Area has enhanced considerably its prospects of success."

With the AfCFTA now the world's largest free trade area since the formation of the World Trade Organisation, it would cover a market of 1.2 billion people, with a combined gross domestic product (GDP) of $2.5 trillion, across the 54 Member States of the African Union that have signed up to the Agreement.

"We have, today, taken very important steps towards working with a common voice and a common purpose to exploit the abundant wealth and resources of our great continent for the benefit of all our peoples. Indeed, the 'Africa We Want' is achievable," the President said.

President Akufo-Addo assured his colleague Heads of State that Ghana would put all the requisite facilities at the disposal of the Secretariat, so that it can run as a world-class organisation.

In addition, and pursuant to the Statutes of the AU Commission, he indicated that the Secretariat would enjoy the privileges and immunities stipulated in the OAU General Convention on Privileges and Immunities, the Vienna Convention on Diplomatic Privileges and Immunities, and the Vienna Convention on the Law of Treaties and the Vienna Convention between States and International Organisations or between International Organisations.

The President urged Assembly to direct the AU Commission to prepare and execute a host-country agreement in accordance with the Executive Council Decision EX.CL/195 (VII) Rev.1 of July 2005 on hosting AU Organs; and hold consultations with Ghana and key stakeholders to prepare the statutes of the AfCFTA Secretariat with a view to providing a report for the consideration of the Council of Ministers of Trade.

"Ghana is ready to donate US$10 million to the African Union to support the operationalisation of the Secretariat. I have set up an inter-Ministerial Committee of my government to work with the AU Commission towards this end," he indicated.

President Akufo-Addo called on pan-African institutions such as the UN Economic Commission for Africa, the African Development Bank, the African Export-Import Bank and other key stakeholders, including friends of Africa, to provide such support as they can, towards the establishment of the Secretariat.

"I am determined to do whatever I can to guarantee the smooth take-off of the Secretariat, and help make sure that it turns out to be a world-class institution, which will become the pride and joy of all Africans," he said. President Akufo-Addo added, "We owe it to generations unborn to ensure that the biggest trading bloc on the globe, whose outcomes will be rewarding to all, and which will assist in attaining the "Africa We Want," does not falter."

IS GHANA BEYOND AID AGENDA TRANSMITTED TO AFRICA BEYOND AID AGENDA?

Immediately, President Nana Akufo-Addo took over the presidency of Ghana, he declared Agenda Ghana Beyond Aid, which instantly echoed on the global village of economies. The President and his government began to embark the largest industrial policy the country had even experienced in its 63 years of post-independence life. Duped “One District One Factory” (1D1F) policy, the policy was to revolutionize industrialization in the country.

Within three years, over 50 factories have been built or revamped across the country. Foreign companies, such as Volkswagen and Toyota Car Manufacturers established assembly plants in the country. Heavy railway development, roads networks and modern interchanges to connect the rural and urban centers and major mineral sites in the countries and the West African subregion were vigorously embarked.

A transnational railway project from the Seaport of Tema through Pagadian to Ouagadougou the capital city of Burkina Faso and the administrative, communications, cultural, and economic centre of the nation. Burkina Faso already has a railway line that runs from Kaya to the border with Côte d'Ivoire. As of June 2014, 'Sitarail' Railway Company operates a passenger train three times a week along the route from Ouagadougou to Abidjan., a journey of 43 to 48 hours.

A trans-regional highway to connect Ivory Coast on the West and Togo on the East has been built through Tema, known as the Tema Motorway Interchange. All these were not just a national agenda, but an agenda towards West African regional trade and African Continental trade as a whole.

The government inaugurated the Ghana Integrated Aluminium Development Corporation (GIADEC) and Ghana Integrated Iron and Steel Development Corporation, two minerals that form the bedrock of industrialization. The move was so significant in the effort by the government to embark on industrialization.

The secretariat of AfCTA in Accra is therefore not just an honour to Ghana, it was something the country has prepared for even if it was not chosen as a host nation.

PROPOSED FUNCTIONS OF THE AfCTA SECRETARIAT
Among others, the secretariat will embark on the following functions:

  • Coordinate, facilitate and support the implementation of the AfCFTA Agreement, its Protocols and Annexes
  • Strategic planning and management of the AfCFTA implementation
  • Facilitate the establishment of a monitoring and evaluation mechanism for follow-up on the implementation of the AfCFTA Agreement and submit annual reports on its implementation to the Council of Ministers
  • Ensure that the implementation of the AfCFTA provides equal opportunities to youth and women
  • Provide administrative and technical support for the implementation and enforcement of the AfCFTA Agreement
  • Serve as a depository of notifications from State Parties required under the AfCFTA Agreement and transmit such notifications to State Parties
  • Convene and service meetings of the State Parties as necessary to implement the AfCFTA agreement
  • Provide, support and facilitate technical cooperation and capacity development programmes as provided for in the Agreement
  • Carry out any other secretarial responsibilities that may be assigned to it by the Council of Ministers
  • Undertake trade and investment promotion activities to enhance intra-African trade
  • Undertake awareness and stakeholder engagement activities to promote the AfCFTA in all member states
  • Undertake periodic trade policy reviews and present reports to the Council of Ministers
  • Mobilisation of funds from partners to implement the AfCFTA
  • Promotion and dissemination of information on the AfCFTA to the Stakeholders
  • Promotion of cooperation with other organisations to promote the objectives of the AfCTA.

Ghana and Africa stand to win, but it requires more work. Ghana’s preparation so far under the able leadership of President Nana Addo Danquah is laudable and on course.

Edward Bamfo-Darko
Edward Bamfo-Darko, © 2020

The author has 31 publications published on Modern Ghana.Column: EdwardBamfoDarko

Disclaimer: "The views/contents expressed in this article are the sole responsibility of the author(s) and do not necessarily reflect those of Modern Ghana. Modern Ghana will not be responsible or liable for any inaccurate or incorrect statements contained in this article."

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