Support towards the Continental Free Trade Area for Africa

Posted on 7 Apr, 2017 by Sanelisiwe Siyotula

On 23-24 January 2017, a key expert team of a GFA-led consortium kicked off a cooperation project of the African Union Commission Secretariat and the EU Delegation to the African Union in Addis Ababa, Ethiopia. The EU-funded project will provide a series of technical studies in support of African Union (AU) negotiation process for the Continental Free Trade Area (CFTA) for Africa. The objective was to introduce the key expert team to the CFTA Unit of the Secretariat. For the upcoming three years, the team will work closely with the CFTA Unit to elaborate studies as required by AU member states. Now the first study has been commissioned. This will further support the latter's negotiating positions in the process. The project is jointly implemented by GFA, DNA Economics (South Africa) and Nathan Associates (US/UK).

Currently, intra-African trade remains low, averaging at about 10 percent of total trade on the continent. In contrast, Africa’s exports and imports are largely determined by its traditional links with the rest of the world, in particular with Europe. Moreover, the continent’s exports are dominated by commodity products, whereas it imports are higher value capital and consumer goods from external sources. These constraints highlight the need for a larger, more efficient and more integrated regional market. The various trade liberalization initiatives under the umbrella of the African Regional Economic Communities (RECs) have made some progress towards the achievement of this goal but successes have been confined to individual RECs. The establishment of the CFTA is expected to further enhance intra-African trade and act as an engine for faster growth and poverty reduction.

The CFTA is part of the 10-year plan of Agenda 2063 the objective of which is to see a prosperous Africa based on inclusive growth and sustainable development. To this end, the project will develop up to 36 technical studies to support the conclusion of the CFTA agreement. The roadmap for the negotiations is ambitious, as it aims at concluding the first round by end of 2017. Areas to be covered are trade in goods, trade in services, customs and trade facilitation in phase one. This will be followed by investment policy and legal and institutional affairs in round two. In light of this, the team of key experts will focus on timely delivery of accurate and appropriate evidence and advice throughout the process.