Cold Link Africa January / February 2020 | Page 33

FEATURE
INCORPORATING COLD CHAIN
So, about trading continentally…
Compiled by Ntsako Khosa
I
n 2019 South Africa ratified the African
Continental Free Trade Area (AfCTA)
agreement showing a commit to
promoting intra-Africa trade. Of the 55
African Union (AU) member states to date,
28 countries have both signed and ratified
the AfCFTA Agreement.
Although in its early stages, the United
Nations estimates that the intra-Africa
trade is expected to grow to 53% by
mid-2020s contributing USD70-billion
(over a trillion rand) to the continents
Gross Domestic Product (GDP). The
agreement commits countries to
removing tariffs on 90% of goods and to
liberalise services.
According to researcher, Michael
Khorommbi, theoretically, the AfCTA has
the potential not only to increase intra-
African trade but to act as a catalyst for
economic growth. “If fully implemented
the African Continental Free Trade Area
will create a trade bloc that is estimated
to bring together a market of 1.2 billion
people – the population of the entire
continent – with a combined gross
domestic product going into the trillions.”
negotiation forum was held in February
2016 and held eight meetings until the
Summit in March 2018 in Kigali.
In February 2017 the technical
working groups held four meetings,
where technical issues were discussed
and implemented in the draft. In March
2018 the AU Ministers of Trade approved
the draft.
At the Summit of the Assembly of the
African Union in March 2018 in Kigali
the Agreement establishing the African
Continental Free Trade Area was signed,
along with the Kigali Declaration and the
Protocol of Free Movement.
Negotiations continued in 2018 with
Phase II, including policies of investment,
competition and intellectual property
rights. In January 2020, AU Assembly
negotiations are envisaged to be
concluded.
COLD LINK AFRICA •
January/February 2020
The AfCTA is an Agreement set up to boost Africa’s economic growth.
OBJECTIVES OF THE AfCTA
•
ORIGINS OF AfCTA
Initial talks of implementing the Agreement
started in 2013, gaining momentum and
negotiations held through various AU
summits. According the AU briefs, the first
The past two issues of Cold Link Africa looked at the export and import of goods globally,
in this issue we look at intra-Africa trade.
•
Establish a single continental market
for goods and services, with free
movement of business professionals
and investments, accelerating the
establishment of the Continental
Customs Union and the African
customs union.
Expand intra-African trade
through better harmonisation and
coordination of trade liberalisation
•
•
and facilitation across Regional
Economic Communities (RECs) and
across Africa.
Resolve the challenges of multiple
and overlapping memberships and
expedite the integration processes.
Enhance competitiveness at the
industry and enterprise level by
exploiting opportunities for scale
production, continental market
access and better reallocation of
resources.
Benefits vs. challenges of the AfCTA
The UN Economic Commission for
Africa (UNECA) estimates that the
implementation of the agreement will
double the share of intra-African trade
(currently around 13% of Africa’s exports)
by the start of the next decade.
According to a research paper
published by the United Nations
Conference on Trade and Development
(UNCTAD) in February 2018, the CFTA
offers many opportunities for sustainable
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