Abuja, Nigerai | ISAAC KHISA | South Africa’s President, Cyril Ramaphosa, has urged Nigeria to sign the African Continental Free Trade Area (AfCFTA) to create a single continental market for goods and services in member nations, with free movement of persons and investments.
Ramaphosa, who was the chief quest during the 25th Annual General Meeting of the African Export-Import Bank in Nigeria’s Capital, Abuja, on July 11, said South Africa signed AfCFTA a week ago as the continents looks forward towards achieving inclusive growth.
“Nigeria should be applauded as you go through the process of consulting all the players,” he said, “but don’t wait too long because the continent is waiting for Nigeria and South Africa.”
Ramaphosa said South Africa now plan to ratifying the pact soon, demonstrating its commitment to the new developments.
Currently only six countries have ratified the pact with about eight planned to do the same before the end of the year, according AU commissioner for trade and industry, Albert Muchanga.
In a rejoinder, Kemi Adeosun, the finance minister for Nigeria said the Africa’s second largest economy on the continent is still consulting.
“We must consult… our local governments, the manufacturers and that is exactly what we are doing across the country,” she said, adding that the want to get the decision right.
Plans to establish the African Continental Free Trade Area with a combined gross domestic product of more than $3 trillion started in 2015 and in May Ghana and Kenya became the first countries to ratify the deal. So far, 49 countries have signed the pact.
The AfCFTA is a project driven by the African Union to eliminate tariffs on intra-Africa trade of goods and services and create a single continental market with free movement of business people. It will only become effective once the parliaments of at least 22 members ratify it.
At the same time, the Cairo-based lender released its 2018 Africa trade report that showed that the trade deficit narrowed to $96.9 billion last year compared with $132.5 billion in the previous year.
Exports increased to $405.3 billion in 2017 from $344 billion a year earlier, while imports advanced to $502.3 billion from $476.6 billion.
The report also notes that whereas Africa’s trade with the rest of the world expanded 11% to $907.6 billion last year, the portion of trade within the continent declined to 14 % of the total. South Africa, Namibia and Nigeria accounted for more than 35 % of intra-Africa trade last year. South Africa contributed a quarter of the region’s domestic commerce in 2017, mostly in oil imports from Nigeria and Angola.
However, the report notes if AfCFTA is implemented on time, the intra-Africa trade could increase by at least half in the next four year. Afreximbank plans to disburse $25 billion to support intra-African trade for five years ending 2021. Last year, the bank approved more than $60 billion in credit facilities to African businesses.