By Pauline Kamiri
African hopes of the African Continental Free Trade Area becoming a success came alive again on January 1, 2021. This is after a six-month delay as a result of the impact of the COVID-19 pandemic. It has been seen as a game-changer for Africa, with the potential to create the world’s largest free trade area since the creation of the World Trade Organization which to some remains a dream and seems unattainable if all factors are held constant.
Key among the goals of ACFTA was creating a single continent-wide market for goods and services and to promote the movement of people and capital easily. It was set to present a major opportunity to reduce extreme poverty by cutting the red tape on custom procedures by simplifying them for the region’s economic growth.
This has however been marred by a lot of constraints starting from differences between different political actors in the individual countries. Many boarders are still closed creating a challenge for economic integration to occur. Countries of East Africa for example Kenya and Tanzania have restored their diplomatic and trade ties after a year of strained relations which is a clear indication that EAC will be stronger. However, Rwanda, Burundi and Uganda also have a continued impasse that seems to never go away creating a rift in EAC’s economic integration
When ACFTA was signed into action it was to create competitive advantage as well as give Africa a share of the global market. This however cannot be achieved by individual countries of Africa which face challenges of poor infrastructure, public debt, and inflation.
There is need to invest in Africa by giving people the opportunity of free movement across member states. This can only be achieved by easing border points and customs restrictions. It is slowly being achieved mostly in the francophone countries which is somewhat a big win for the continent, and it shows that regional integration is achievable in the long run. Several regional economic blocs are doing well in cross border trade among the individual countries with small traders now being able to move easily to other countries of the same region to trade.
However, the harmonization of a common currency is yet to be achieved since a common economic framework is miles away from being achieved. This is because integration of medium and small economies is a challenge since most of the medium and higher economies have monopolies that are protected heavily by trade barriers thus low profitability and income is experienced.
Creating and maintaining of strong economic frameworks for countries in different regional blocs will further open up for people to move freely and in the end culminate to opening up trade and ACFTA will be achieved.
Due to the unprecedented COVID-19 pandemic achieving the gains from ACFTA have become even more difficult caused by major disruptions of trade across the continent, including in critical goods such as medical supplies and food. However African nations are putting their best foot forward by increasing regional trade, lowering trade costs and streamlining border procedures. The full implementation of ACFTA would help African countries increase their resilience in the face of future economic shocks and help usher in the kinds of deep reforms that are necessary to enhance the long-term growth of the continent