The International Monetary Fund (IMF) has said in spite of Nigeria, Africa’s biggest economy, opting out of signing on to the African Continental Free Trade Area (AfCFTA), the benefits of the trade pact to the region are still enormous.
It noted that in recent years there has been significant improvement in intra-Africa trade, which has moved up from below 10 percent to almost 20 percent.
Abebe Aemro Selassie, Director of the IMF’s African Department, said this while briefing journalists on the economic development of the macroeconomic situation in sub-Saharan Africa, and the policies and reforms needed to ensure a stronger and durable recovery, at the ongoing IMF/World Bank Spring meetings in Washington DC.
President Muhammadu Buhari had cancelled his trip to Kigali, Rwanda, to attend an Extraordinary Summit of the African Union in March to sign the framework agreement for establishing the African Continental Free Trade Area.
Buhari had said his administration will not be in a hurry to enter into any agreement that would make the country a dumping ground and jeopardise the security of the nation.
Consequently, he had set up a committee to review the Continental Free Trade Area (CFTA) framework agreement.
Forty four African countries had gone ahead to agree to form a $3 trillion continental free-trade zone encompassing 1.2 billion people, even as the continent’s two biggest economies, Nigeria and South Africa, were among countries that withheld their consent.
Selassie said on Friday at the IMF headquarters that in recent years “we have seen significant Improvement in intra-Africa trade, [which] has moved up from below 10 percent to almost 20 percent of the region’s trade.
“What is interesting is that much of what Africa trades with each other tends to be more processed, more manufacturing goods, and exactly more diversified exports that Africans are thinking.
“So we thinking that the CFTA, when fully implemented, coupled with removal of non-tariff barriers, facilitating infrastructure should connect markets…
“Overall we feel that CFTA is an important agreement that many African countries will benefit from.”
The decision to establish the AfCFTA was taken in 2012 by all Heads of State and Government of the African Union at their 18th Ordinary Session.
AfCFTA is the first step in the implementation of AU Agenda 2063: the “Vision” for an integrated, prosperous and peaceful Africa.