The sheer scale and complexities involved in negotiating a single rule book for the trade of goods and services on a continent that is home to 54 countries at different levels of development and expertise leaves much uncertainty as to whether the singular agreement will be concluded and signed by the end of this year.
Negotiations for the anticipated Continental Free Trade Agreement (CFTA) were officially started in June 2015, with ambitions of having the single agreement launched by 2017.
“Is this agreement achievable by the end of 2017? Maybe. Maybe not,” Department of Trade and Industry trade director for African Union Claudia Furriel said, pointing out that the move to integrate economies into a single market was ambitious.
“We have 54 African countries negotiating one agreement for the whole of Africa,” she told delegates at the Southern African Metals and Engineering Indaba on Thursday.
“History will tell us that it is not really possible to conclude a CFTA in a year-and-a-half.”
However, the envisioned short timeframe showed the level of political will backing the agreement that would allow the continent to “really integrate” and take ownership of its own development.
The CFTA was aimed at creating a single continental market for goods and services, allowing for free movement of business persons and investments and expanding intra-African trade through better harmonisation and coordination.
The agreement aimed to ensure the employment of the same tariff book and list of rules, signed and agreed by all African countries, to transform the structure of African countries’ economies into a more prosperous and more sustainably developed scenario.
This would unlock an improvement in intra-African traded goods and services, better customs cooperation between the countries, the elimination of nontariff barriers and the improvement of investment prospects on the back of economies of scale.
Much progress had already been made, Furriel said, citing the conclusion of agreements on the negotiating principles, the modalities for the tariffs and services and the start of negotiations on the actual text that would give rise to CFTA.
Meanwhile, Africa House’s Duncan Bonnet said it was often overlooked just how important the rest of Africa was to South Africa’s wellbeing and just how much the rest of the continent kept the country’s factories open.
He noted that sub-Saharan Africa accounted for nearly 30% of South Africa’s global exports. Some 35% of South Africa’s value-added exports were into Africa and, of that, 85% was exported to the South African Customs Union, where a free trade agreement already existed.
“These are markets that are important to us. We need to be cognisant of [this],” he said.