Towards One African Market
Next month Africa will take a bold step towards integration with the launch of negotiations for the Continental Free Trade Area (the CFTA). A trader in Ghana with dreams of breaking into the faraway markets of East Africa will be one step closer to making his or her dream a reality. Presidents from all around the continent will gather together at the African Union’s Heads of State and Government Summit in Johannesburg, South Africa (from the 7th to the 15th of June) to launch negotiations that will lead to the establishment of a free trade area to span the continent. Now there’s a real urgency among Africa’s leaders to find ways to break down the barriers that separate their economies. As Kenya’s President Uhuru Kenyatta passionately put it:
“There cannot be a good reason why it is easier for us to trade with Asia, Europe and the Americas, rather than with fellow Africans.”
That sentiment is echoed on the other side of the continent by H.E Mr. John Mahama, President of Ghana and Chair of the High-Level African Trade Committee:
“It was a dream of our founding fathers to create a continent where people can move freely (with) goods and services across the continent. Fast tracking the creation of a CFTA is the way to go”. -
Africa’s leaders have set 2017 as the deadline for establishment of the CFTA. Creating a free trade area among Africa’s 54 countries won’t be easy and will require an enormous amount of energy and effort but there’s a firm belief that for the continent to truly develop Africa must trade with Africa.
But it’s not just about trade.
The CFTA will help address many of Africa’s biggest challenges such as youth unemployment, skills development, women’s empowerment, industrialization and infrastructure development.
The African Union’s Trade Commissioner, H.E. Mrs. Fatima Haram Acyl, is inviting key members of the media to join her at the Summit to hear more about the launch of the negotiations of the CFTA and what this historic milestone means for Africa. The Department of Trade and Industry is assembling prominent delegates and African Union representatives for the media to interview. Commissioner Acyl says:
“The CFTA would bring together 54 African countries with a combined population of more than one billion and a combined gross domestic product of more than US$3 trillion. It would establish a single continental market
for goods and services… help [ing] turn 54 fragmented and individual African economies into a larger and more coherent market.”
Contact information
Please contact the individuals below for further information and to set up interviews:
Batanai Chikwene (Trade Policy Officer, AU Commission): chikweneb@africa-union.org, +251 912 60 10 24
Joanne McNally (Media consultant to the AUC’s Trade and industry Department): joanne@markeddomedia.com or Telephone: +44 7767 787 656
If you haven’t already, we encourage you to register for the summit at http://summits.au.int/en/25thsummit/accreditation
Further information
The Time is Now
The need for action on the CFTA is urgent. The world is changing with the countries in other parts of the globe joining Mega-Regional Trade Agreements (MRTAs), and that is reshaping the global trading system. Africa must act now, or risk being left behind. Research by the United Nations Economic Commission for Africa shows that the establishment of the CFTA will better position the African continent vis-à-vis the rest of the world.
Never before have our challenges been so large. Africa faces a myriad of development challenges: high youth unemployment, a low-skilled workforce, and issues of international migration, widespread poverty, gender inequality, and limited industrialization.
At the same time, never have we had so many opportunities to capitalize on. The establishment of the Continental Free Trade Area will help combat these myriad challenges while taking advantage of the opportunities.
2017 is an Ambitious but Achievable Goal
The African Union is planning to conclude the negotiations for the Continental Free Trade Area (CFTA) by 2017. While we will have to overcome many challenges, we can achieve this goal.
We are not starting from scratch. Progress is already underway with the Tripartite Free Trade Area (TFTA), launching in June 2015, which includes 26 African countries, and the 15 countries of ECOWAS, the Economic Community of West African States, which have already come together.
There are also significant gains that can be made by negotiating certain issues that have been less controversial. It is also possible for a coalition of countries to go forward with negotiations for more contentious issues and for other countries to join when they are ready. Ideally, all AU member states should participate in the negotiations and consider making commitments on specific issues as and when they are ready to do so.
And the CFTA has support a wide range of African leaders:
H.E Mr. John Dramani Mahama, President of the Republic of Ghana and Chair of the High-Level African Trade Committee:
“It was a dream of our founding fathers to create a continent where people can move freely and goods and services across the continent. Fast tracking the creation of a CFTA is the way to go”.
H. E. Mr. Uhuru Kenyatta, President of Kenya:
“There cannot be a good reason why it is easier for us to trade with Asia, Europe and the Americas, rather than with fellow Africans.”
H.E. Mrs. Fatima Haram Acyl, Commissioner for Trade and Industry, African Union Commission:
“Our leaders believe in the potential of the CFTA to unleash substantive benefits for Africa’s socio-economic growth and development. Its establishment will significantly boost intra-African trade and investment, making it easier to move goods, services, and people around the continent. It will support 4 sustainable development, create jobs and empowering women, as well as strengthening the geopolitical position of Africa vis-à-vis the rest of the world.”
The CFTA by the Numbers:
54 countries
More than 1 billion people
Over US$3 trillion in total GDP
52% ($35 billion) increase in intra-African trade by 2022
6% increase in African exports
Other Benefits of the CFTA include:
Boosting intra-African trade:
The World Trade Organization estimates that intra-African trade in 2012 was about 12%. This is in stark contrast to much higher rates of intra-regional trade in more developed regions of the world: 60% in Europe, 40% in North America, and 30% in ASEAN.
United Nations Economic Commission for Africa (UNECA) estimates that the CFTA could increase intra-African trade by $35 billion, or 52% above the baseline, by 2022.
It further estimates that agricultural and industrial exports would increase by $4 billion (7%) and $21 billion (5%) above the baseline, respectively.
“There cannot be a good reason why it is easier for us to trade with Asia, Europe and the Americas, rather than with fellow Africans.” – H.E. Uhuru Kenyatta, President of Kenya
Increasing exports:
Africa’s share of global trade is only about 3%
UNECA estimates that in conjunction with ongoing initiatives, such as trade facilitation measures to reduce time and cost of trading, the CFTA would help increase Africa’s export volumes to the rest of the world by 6%.
Improving Africa’s political position via-a-vis the rest of the world:
UNECA has shown that the establishment of the CFTA will better position the African continent to negotiate in the multilateral trading system
“Research on the impact of these [Mega-Regional Trade] agreements on Africa is clear: We will be better positioned and better off if we move to establish the CFTA as quickly as possible.” – H.E. Mrs. Fatima Haram Acyl, Commissioner for Trade and Industry
As part of the long-term vision of Africa:
The CFTA is a flagship project of the African Union’s Agenda 2063
“It was a dream of our founding fathers to create a continent where people can move freely (with) goods and services across the continent. Fast tracking the creation of a CFTA is the way to go”. - H.E Mr. John Dramani Mahama, President of the Republic of Ghana and Chair of the High-Level African Trade Committee.
As well as:
Increased food security through reduction of the rate of protection on trade in agricultural produce among African countries
Increased competitiveness of Africa’s industrial products through harnessing the economies of scale of a large continental market of about one billion people
Increase Contact information
Please contact the individuals below for further information and to set up interviews:
Batanai Chikwene (Trade Policy Officer, African Union Commission): chikweneb@africa-union.org, +251 912 60 10 24
Joanne McNally (Media consultant to the AUC’s Trade and industry Department): joanne@markeddomedia.com or Telephone: +44 7767 787 656
If you haven’t already, we encourage you to register for the summit at http://summits.au.int/en/25thsummit/accreditation
d rate of diversification and transformation of Africa’s economy and the continent’s ability to supply its import needs from its own resources
Better allocation of resources, improved competition and reduced price differentials among African countries.
Growth of intra-industry trade and the development of geographically-based specialisation in Africa
Reduced vulnerability of Africa to external trade shocks, and
Enhanced participation of Africa in global trade and reduced dependence of the continent on aid and external borrowing.
Contact information
Please contact the individuals below for further information and to set up interviews:
Batanai Chikwene (Trade Policy Officer, African Union Commission): chikweneb@africa-union.org, +251 912 60 10 24
Joanne McNally (Media consultant to the AUC’s Trade and industry Department): joanne@markeddomedia.com or Telephone: +44 7767 787 656
