At the African Union (AU) Summit in Niamey, capital of Niger Republic on Sunday, President Muhamadu Buhari signed the Africa Continental Free Trade Agreement (AfCTA) on behalf of Nigeria, joining 53 other countries. During the summit, AU member states launched the “operational phase” of a landmark free-trade accord creating what leaders hope will be the world’s largest free trade area.
The AfCTA agreement is an umbrella instrument for the trade negotiations between the 55 African Union (AU) member states. It is divided into two phases (Phase I and II).
Each phase requires its own instrument of ratification by AU member states. On March 21, 2018, following 10 negotiating rounds, 44 of 55 AU member states signed the agreement establishing the Phase I of AfCFTA. Notably, 54 AU states have signed the agreement (Phase I) while 27 states have ratified it. Eritrea is the only states still on the side-line. This development means that the Phase I of AfCFTA (which captures the protocol for trade in goods, services and dispute resolution) is now a binding legal instrument in those countries that have ratified the agreement.
While there are still key issues to be ironed out, such as setting common criteria to determine rules of origin for traded products as well as all Phase II issues (which are still outstanding), this agreement creates an avenue to boost infrastructural development and economic activities within the continent via increase trades, in the face of increasing protectionism in the rest of the world.
United Capital Plc Research (UCR)