News update: Free Trade Area starts off but major obstacles remain

 News update: Free Trade Area starts off but major obstacles remain

News update.

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It may seem like a coincidence that the African market grew larger the very same day that Europe’s shrunk. Britain separated from the EU on the first day of the year as African countries started trading under the new African Continental Free Trade Agreement, or AFCFTA, which created a single, tariff-free market for the 1,27bn African population. The implementation of the agreement, however, was delayed due to the lockdowns that stemmed from the Covid-19 pandemic which saw the closure of borders and strict restrictions on travel.

Other issues may deter the success of the agreement. A month before it was implemented, major obstacles were faced at the Beitbridge border post, which saw numerous freight trucks queuing for kilometres on either side.

It was blamed on a lack of consultation and proper communication. Government failed to consult with industry bodies, and it took a unilateral decision for stringent Covid-19 testing to be conducted at the border posts, which caused severe delays. A lot of planning and collaboration is necessary to ensure that operations run smoothly through the border, with numerous suggestions made to ensure this.

Aaron Motsoaledi, Minister of Home Affairs, has promised that by 2024, his department plans to ensure that Beitbridge would be one of the six one-stop border posts, with separate lanes for taxis, pedestrians, private vehicles and trucks. Should this agreement be implemented effectively, it may see 100m Africans lifted out of poverty by 2035, with the majority being women. One out of 55 African Union member states have not signed the AfCFTA, with 33 ratifying it and 40 who have submitted their tariff offers. The remainder of negotiations are set to be completed by July this year.

Chris Louw

https://sashares.co.za/

Featured Financial Writer for SA Shares - Read more about Chris's Bio -

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