Despite opposition by Nigeria’s private sector operators against the proposed African Continental Free Trade Area (AfCFTA) agreement, the framework document has got the strong commitment and support of finance ministers and policy makers from across the continent.
At the close of a high-level meeting where real issues affecting the continent were discussed, the finance ministers and policy makers reaffirmed their commitment to AfCFTA.
The proposed free trade deal seeks to bring together 55 African countries with a combined population of more than 1.2 billion people, including a growing middle class and a combined Gross Domestic Product (GDP) of about $3.4 trillion.
At the meeting, which was hosted by the United Nation’s Economic Commission for Africa (ECA) in Addis Ababa, Ethiopia, during the week, the ministers and policy makers called on governments to ensure that they make the policies and investments necessary to capture the economic benefits of the proposed trading bloc.
A ministerial statement from the 51st session of the Council of Ministers recognised the potential of the AfCFTA to advance industrialisation, economic diversification and development to foster prosperity for all on the continent.
It however, recognised the challenges including concerns over the impact upon the tax base arising from a single continental market for goods and services.
“The short-term impact is likely to be minimal and will be outweighed in the medium and long term by the positive impacts of revenue from other sources of taxes.
“These new sources would arise from economic growth and diversification from trading in a bloc of 1.2 billion consumers,” the statement said.
The meeting also acknowledged the need for the bloc to advance trade facilitation measures, which include simplified trade regimes for informal cross-border traders and upgrading trans-boundary infrastructure to assist firms keen to penetrate the new markets opened up by the agreement.
In throwing its weight behind the proposed agreement, the Council of Ministers recognised the private sector as playing the central role in achieving this project to create a more empowered, inclusive and transformed continent.
It was agreed that it would be essential for businesses to partner governments to develop innovative financing solutions to tackle health, education, infrastructure and environmental challenges that can hold back Africa from effectively operating and benefitting from the bold economic plan.
The statement came after four days of dialogue and robust exchange on the theme: “African Continental Free Trade Area: Creating Fiscal Space for Jobs and Economic Diversification”.