ECOWAS’ red tapes threaten nations’ share of $3.4 trillion free trade revenue
Nigeria and other member countries in the Economic Community of West African States (ECOWAS) may lose out in the $3.4 trillion combined GDP of the Continental Free Trade Area (CFTA) economy by 2017 when the CFTA becomes operational if regional trade challenges are not addressed.
Indeed, while the three Regional Economic Communities (RECs)—the Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC) and Southern African Development Community (SADC)—have reached an agreement to expedite the process towards the operationalization of the tripartite Free Trade Area by finalising outstanding issues, the ECOWAS region continues to lag behind as the region continues to grapple with infrastructure and red tapes.
The CFTA, which is expected to be in place by October 2017, will bring together 54 African countries with a combined population of more than one billion people and a combined gross domestic product of more than $3.4 trillion.
With the CFTA, African leaders aim to, among other things, create a single continental market for goods and services, free movement of business persons and investments and expand intra-African trade. The CFTA is also expected to enhance competitiveness at the industry and enterprise levels.
Already, the tripartite agreement would see the establishment of a single market for the 26 African countries in the Eastern and Southern African Region, while outstanding issues like the elimination of import duties, trade remedies and rules of origin, as well as the commencement of Phase II negotiations covering trade in services, cooperation in trade and development, competition policy, intellectual property rights and cross border investments would be addressed under the outstanding issues.
To address the challenges, an expert group comprising representatives of Africa’s regional economic communities, the African Union Commission, the Economic Commission for Africa (ECA) and academia met in Nairobi, Kenya, to discuss issues connected to the Continental Free Trade Area (CFTA).
The meeting focused on nine issues that can be feasibly achieved or agreed upon ahead of the October 2017 deadline. These are; trade in goods, trade in services, agriculture, fisheries provisions, industrial pillar, common investment area, trade facilitation and customs cooperation, trade remedies and competition policy and institutional arrangements for implementation.
In a statement obtained by The Guardian, the Executive Secretary of the Economic Commission for Africa (ECA), Carlos Lopes lauded the tripartite free trade area agreement reached by three Regional Economic Communities (COMESA, EAC and SADC) describing it as “a step in the right direction for the continent.”
African countries committed themselves to economic integration in 1991 through the Abuja Treaty, which came into force in 1994 with the intention of moving towards the African Economic Community.
The process of this integration would entail RECs serving as building blocks. The harmonization of trade policies through the Tripartite Free Trade Area is yet another building block,” he added.
While not all countries have signed on to their region’s tripartite agreement and the negotiations towards the 2017 deadline for the establishment of the CFTA will need to address some thorny issues, Lopes stressed that the principle at work is that of ‘variable geometry’ as not all countries are ready at the same time.
He cited the 2015 Economic Report on Africa published by the ECA stating that deepening market integration is one of the necessary conditions for industrialization in Africa. The tripartite agreement, he added, “has set a benchmark for the CFTA, as it demonstrates it can be done.”
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