'There is no way Nigeria will walk away from the CFTA': Short-term losses will be outweighed by long-term gains for countries participating in the Continental Free Trade Area, says the coordinator of the African Trade Policy Centre: David Luke, coordinator, African Trade Policy Centre.

Author:Dzirnwasha, Taku
Position:COVER STORY: FREE TRADE - African Continental Free Trade Area
 
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The African Continental Free Trade Area (CFTA) summit held in Kigali, Rwanda in March 2018 was supposed to be the culmination of former Ghanaian President Kwame Nkrumah's dream of a truly united Africa.

The CFTA, which was drafted in Niger in December 2017, envisages a trade area across the continent covering a market of 1.2bn people with a combined GDP of $2.5 trillion. According to research conducted by the UN Economic Commission for Africa (UNECA), the agreement could boost African economic output to around $29 trillion by 2050, and increase intra-African trade significantly. Currently, it stands at around 18% of total trade, which compares negatively to 59% in Asia and 69% in Europe.

But just days before leaders from across the continent were supposed to sign the agreement, Nigeria's President Muhammadu Buhari announced that Africa's largest economy would not sign up to the historic accord pending further discussions with local trade unions and the business community. The move surprised most delegates in the opulent conference hall of the Kigali Convention Centre, especially because part of the agreement was negotiated under the chairpersonship of Nigeria.

The country's absence was compounded by the fact that South Africa, which is the continent's second-largest economy, also did not sign up to the agreement. The absence of the two largest economies, however, did not come as a shock to one of the architects of the agreement, David Luke, coordinator of the African Trade Policy Centre (ATPC) at UNECA.

"It's not all that surprising that we had countries changing their minds," Luke says. "Implementing a trade agreement is complex. There are so many constituents and interests that need to be considered. So, it's normal that on the eve of signing an agreement that a country may say, 'Hey, let's pull back; let's look at this thing afresh'.

"If you remember when Canada and the European Union (EU) were negotiating a free-trade agreement at the end of 2016, there was a group from Belgium that had concerns and the agreement was blocked for a while. But, following further discussions, the issue was resolved and the agreement was approved by both parties."

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