The African Continental Free Trade Area1 (AFCFTA) which is has of most African Cou6ntries2, aims to create a place where African States (Countries) can promote and improve their goods and services trading. The AFCFTA Agreement is the document that sets out the countries' objectives and commitments.
In this article, we will consider (i) the history of the AFCFTA, (ii) the effects of the AFCFTA on the Nigerian Economy; (iii) some of the benefits and opportunities of AFCFTA to Nigeria; and (iv) some recommendations that may help improve some of the challenges that the AFCFTA may face.
In 1963 the Independent States3 Of Africa founded the Organization of African Union (OAU) to promote cooperation between all African States. In 1980, the action plan was to boost intra-African Trade. In 1991, the African Economic Community (AFC) created a Treaty that promoted the development of accessible trade areas, customs unions, an African Central Bank (ACB), and an African common currency union (ACCU).4
The African Union (AU) succeeded the OAU in 2002 to accelerate the "economic integration of the Continent.5"and to "coordinate and harmonise policies between the existing and the future Regional Economic Communities.
The AU Heads of State initiated the idea of establishing an African Continental Free Trade Area (AFCFTA) with the vision of becoming the largest free trade area in the world by
having a combined Gross Domestic Product (GDP) of more than $3.4 trillion. On 21 March 2018, 54 of the 55 African countries signed the AFCFTA agreement draft. The Agreement came into force on 30 May 2019 and entered its operational phase on 7 July 20196, and it officially commenced on 1 January 2021.
State Parties to the AFCFTA agreement are committed to eliminating tariffs on most goods and services over 5, 10, or 13 years. The number of years depends on the country's level of development, the nature of the products, and other methods or deciding factors are captured by the long-term objectives of the Agreement, which are:-
The scope of the Agreement covers the following: -
The Agreement is divided into 2 phases:
Phase 1 includes: -
Phase 2 includes the:
The establishment of the AFCFTA marks a key milestone, and the size of the trade area presents promising sustainable economic development and growth that may reach all Sectors and a vast number of participants.
The benefits of AFCFTA are:
Nigeria signed the AFCFTA Agreement on 7 July 2019, and a Presidential National Action Committee on AFCFTA (NAC-AFCFTA) was constituted and inaugurated to proffer viable strategies for implementing AFCFTA. The NAC-AFCFTA was mandated to coordinate all AFCFTA readiness interventions and monitor the Agreement's implementation as it works toward its full achievement. Consequently, the NAC-AFCFTA set up 14 Workstreams to drive the implementation of the Agreement and engage stakeholders across all sectors of the Economy. These Workstreams are broadly categorised into four areas discussed below23:-
The African Continental Free Trade Area (AFCFTA) is the creation by Africans for Africans to promote intra-regional Trade and harness opportunities in their states and within the Continent. The AFCFTA presents tremendous potential and opportunities for all State Parties, and utilising these potentials and prospects will likely expand the Africa Trade Area and ensure its global recognition.
The success of AFCFTA is on the State Parties who must: -
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