By Abdul Rahman Suagibu –
NEW AFRICA BUSINESS NEWS, Freetown, Sierra Leone- African leaders pronounced plans for a continent-wide free trade area; a show that explains an important turn around in intra-African economic and trade ties that would yield dividend add economically and that could also to solving the challenges that have restricted these economics. If successful the African continent free Trade Area would create a 55-nation trade bloc and a single unified market for the continents 1.3 billion people and boost economic development in an estimated market of $3.4 trillion. The agreement was reached after from years of burdensome negotiations, to overcome all obstacles, facing the implementation of the agreement. This may complex hurdles that are not easy to overcome.
African countries suffer from political, social conflicts and divisions. This was the reason that effectively led a straight tapering nod to Egyptian President Abdul Fattah Al Sisi to say during the African Summit “We still have a long way ahead…. But we need to continue its”
He cited the Arab experience when Arab countries approved a similar agreement 15 years ago, but it remained in active because of disparities over political issues or those related to trade regulations and laws. African countries will face similar difficulties that if not overcome, will consign the agreement to paper and nothing else.
Therefore, African nations need to overcome legal obstacles negating the implementation of the agreement because; some countries lack the required regulations. Other countries; laws are varied and sometimes conflicting. This requires them to take rapid actions to amend these laws and seek convergence.
They also need to pump in huge investments to develop intra-trade infrastructure so that, it can meet anticipated growth. Aside from political differences, that need to be reduced as a means to create an atmosphere of trust necessary for this type of collaboration, there are structural economic factors related to each African country’s trade ties with partners from outside of the continent, such as the European Union, which is deeply linked to the Arab Maghreb.
Precisely, there are some East African countries with strong trade ties to China. The development of intra – African trade needs more diversified economics. This needs time and huge investments, because trade between similar economics is usually limited and does not exceed 10% in the African continent.
The impact of the new agreement can be seen in the content of the current levels of intra- Africa trade. The GCC’s free trade agreement shows that there are many benefits. Its implementation 30 years from now; has nearly doubled trade between GCC countries, rising from 6% to 15% of the total GCC.
Despite the preceding challenges mentioned above, the African countries will undoubtedly achieve gains. The agreement will help unlock Africa’s long- stocked economic potential by boosting intra-continent trade. It will also help create jobs and reduce the prices of many locally manufactured goods after exemption from customs duties. The agreement will provide better conditions for setting up joint projects and smooth the flow of capital.
Although this gain cannot be underestimated, everything intertwines on overcoming any obstacle that may letter the new deal. Good faith, honoring commitments and enhancing mutual trust are supplementary cursors to make Africa and its people reap the fruits its labor.
For New Africa Business News Abdul Rahman Suagibu Reports, Africa Correspondent
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