A general view shows the opening session of Heads of States and Government of the African Union on the case of African relationship with the International Criminal Court (ICC) in Ethiopia's capital Addis Ababa, October 11, 2013 – Reuters
CAIRO – 21 March 2018: The Continental Free-Trade Zone (CFTZ), the pan-African trade liberalization agreement, is an important step towards establishing the common African market, paving the way for an economic African union, Trade Minister Tarek Kabil said Wednesday.
He said that the agreement will help achieve the African economic integration, enhance sustainable development and increase growth rates for African states in light of Africa’s vision 2063.
This came during a speech read out by Kabil on behalf of President Abdel-Fatah al-Sisi during the summit of African heads of state in the Rwandan capital of Kigali. African leaders are set to sign the agreement at the summit.
Kabil said that President Sisi is keen on making the negotiations on the African trade liberalization agreement a success, saying that Egypt is ready to provide all kinds of support to complete the negotiations. He said that enhancing relations with all African states comes on the top of Egypt’s priorities.
Sisi said that the establishment of CFTZ was the culmination of the strong will of the African continent and its people over the past years and negotiations since the 18th African summit in Addis Ababa in 2012.
Kabil said that the agreement will enhance trade exchange between African states, stressing on the importance of developing infrastructure, especially the transport sector, as it will help double trade exchange between African countries to reach 22 percent of total trade by 2022.
The CFTZ is set to include all 55 member states of the African Union, but Nigeria and Uganda had pulled out from the Kigali summit at the last minute. Nigeria said it needs more time to review the terms.
According to the African Union, the agreement would consolidate a market of 1.2 billion people and a gross domestic product of $2.5 trillion.
International Rating agency Moody’s said that the African continental free trade area could boost intra-regional trade, which remains far lower than in developing Asian countries. It also could improve the region’s credit profiles, but obstacles will limit benefits, the agency said.
“There is significant potential for further trade integration in Africa, which the CFTZ could stimulate,” Moody’s said.
It added that South Africa, Kenya and Egypt are most likely to benefit from further trade integration in Africa, adding that morocco, Namibia, Tunisia, Côte d'Ivoire, Senegal and Cameroon also stand to gain from increased intra-African trade.
According to the African Union, the objectives of the agreement is to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Continental Customs Union and the African customs union.
It targets to expand intra African trade through better harmonization and coordination of trade liberalization and facilitation regimes and instruments across Africa and resolve the challenges of multiple and overlapping memberships, expediting the regional and continental integration processes.
It also aims to enhance competitiveness at the industry and enterprise level through exploiting opportunities for scale production, continental market access and better reallocation of resources.