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Nigeria signs African Continental Free Trade Area agreement at AU Summit

08 Jul 2019
Financial Nigeria

Summary

The aim of the AfCFTA is to create the world’s largest free-trade zone, increase intra-African trade by 52 per cent by 2022 and remove tariffs on 90 per cent of goods.

Nigerian President Muhammadu Buhari

President Muhammadu Buhari signed the African Continental Free Trade Area (AfCFTA) agreement as the process of operationalising the agreement commences. The Nigerian President signed the agreement on Sunday at the 12th Extraordinary Summit of the African Union (AU), taking place in Niamey, Niger, on July 7-8.

President Buhari had promised on July 2 that he would sign the AfCFTA agreement at the AU Summit. The presidency’s post on Twitter read: “Nigeria will sign the AfCFTA at the upcoming Extraordinary Summit of the African Union in Niamey, Niger.” Nigeria became the 53rd state on the continent to append its signature to the document.

The agreement was first signed on March 21, 2018 by 44 of the AU 55 member states in Kigali, Rwanda. Nigeria and South Africa, two of the continent's biggest countries, did not sign the deal at the time. South Africa subsequently signed the agreement at the AU Summit in Nouakchott, Mauritania, in July of last year.

The decision to sign the trade deal came after the president received the report of the committee set up to carry out an assessment of the AfCFTA and its potential risks for Nigeria. The committee, which was inaugurated in October 2018, submitted its report on June 27, 2019.

“I wish to assure you that Nigeria shall sustain its strong leadership role in Africa in the implementation of the AfCFTA,” Buhari said while signing the agreement. “We shall continue to constructively engage with all African countries to build the Africa we want.”

He also emphasized that free trade must also be fair trade. “As African leaders, our attention should now focus on implementing the AfCFTA in a way that develops our economies and creates jobs for our young, dynamic and hardworking population,” Buhari said.

The President of Benin, Patrice Talon, also signed the AfCFTA agreement at the AU Summit, bringing the number of States who have signed the agreement to 54. Consequently, Eritrea is the only country that has not assented to the trade deal.

After signing the agreement, countries are expected to deposit their instrument of ratification with the AU Commission Secretariat. The AfCFTA had come into force on May 30, following the ratification of 22 countries. Gambia was the 22nd country to ratify the AfCFTA when its parliament ratified the agreement in April.

Intra-Africa trade is the lowest compared to trade among countries in other continents. The aim of the AfCFTA is to create the world’s largest free-trade zone, increase intra-African trade by 52 per cent by 2022 and remove tariffs on 90 per cent of goods.

According to the AU, the launch of the operational phase of the AfCFTA will enable traders across Africa to be able to make use of preferential trading arrangements offered by the AfCFTA, with the understanding that the trade transactions are among member states that have ratified the agreement and conform to the provisions on rules of origin governing trade in the AfCFTA.


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