For the first time in African economic history, nearly 5000 traded products have achieved 88 percent convergence. With a single set of rules, the continent can now engage in easy trade and investment, the AU summit heard.
Almost 88.3 products across the African continent are able to benefit from this rule, according to the Secretariat of the African Continental Free Trade Area (AfCFTA).
"Due to this milestone, our continent is presenting itself as a continent with a high level of industrial development and investment potential," said Wamkele Mene, Secretary-General of AFCFTA.
He spoke during the Opening Ceremony of the 36th Ordinary Session of the AU Assembly in Adis Ababa, Ethiopia.
A free trade agreement (FTA) is an international treaty between two or more economies that reduces or eliminates certain barriers to trade in goods and services, as well as investment.
FTAs can improve market access across all areas of trade - goods, services and investment
A pandemic outbreak in 2020 threatened to derail the successful initiation of the continental free trade area, Mene reminded the ministers and heads of state.
"Even under these extremely challenging circumstances caused by the pandemic and the challenging global economic environment, we have been able to make some progress," he said.
A few of the achievements enumerated were the establishment of an AFCFTA adjustment fund, capitalised by African bank which already has a billion-dollar capitalization with more funds to be raised to benefit AFCFTA states parties.
Under the Guided Trade Initiative, AFCFTA launched the first commercially meaningful trade on the African continent. Eight African countries, including Ghana, Egypt, Tanzania, Rwanda, Kenya, Mauritius, Cameroon, and Tunisia, traded goods under the preferential rules of the AFCFTA for the very first time.
"The most important aspect of the guided trade initiative was in demonstrating that beyond enhanced trade flows we can deliver inclusive benefits and opportunities for all," he noted.
For instance, he said the tea that was exported from Kenya to Ghana was produced by smallholder farmers. These farmers were organised into cooperatives for export under the AFCFTA. Which he said was a remarkable story of inclusivity in trade.
Another success he cited was the launch of the Pan African payments and settlement system, which will enable trade in local currency in record time.
"We established a fully functional secretariat that has a 50-50 gender parity that has as many men as it has women in positions of senior in senior positions, including positions of director secretariat that has all official languages of the AU," he noted.
He said with the public health crisis from which the continent is emerging, and of course, the food insecurity crisis that is attributable to the current geopolitical context AFCFTA presents itself as a tool to be deployed by the African Union, to position Africa to adequately respond to the challenges of our time.
Later, during summit sessions, the summit will adopt a protocol on intellectual property rights. This protocol will be adopted by the assembly. The protocol has the potential to address Africa's public health, industrial and development imperatives.
To address the food insecurity crisis, the Council of Ministers of trade resolved to develop a strategy for boosting intra-Africa trade in agricultural products.
He said: "We are on track to conclude the protocols on digital trade and the protocol on women and youth in trade."
He explained that the protocol on digital trade is set to broaden access to trade, particularly for small and medium enterprises that are led by women and young Africans.
This will address the critical imperative of digital financial inclusion.
At the start of the summit, the theme for the year 2023 was launched, which is "Accelerating the Implementation of the AFCFTA."
