The twelfth Extraordinary Session of the Assembly of African Union (AU), held on 4-8 July 2019 in Niamey, launched the African Continental Free Trade Area (AfCFTA) which is the largest free trade area on earth encompassing all countries of the continent. The AfCFTA will cover more than 1.2 billion people with a combined GDP of USD2.5 trillion. The launch of the operationalization of the AfCFTA is now creating a single market for goods and services.
Some of the estimates show that the establishment of the AfCFTA will stimulate total African exports by 4 percent (US$25.3 billion) and result in an overall 52 percent (US$34.6 billion) increase in intra-African trade compared to the baseline of no trade reforms in 2022. Trade in industrial goods is expected to increase by 53 percent between 2010 and 2022.
While the AfCFTA offers numerous opportunities in terms of larger markets, greater efficiency and competition, increased welfare, higher level of intra-African trade, and diversification of products, a key next step necessary for the successful implementation of the AfCFTA is ensure countries’ readiness. It is therefore necessary to ensure that countries define their contextual priorities and have a good understanding of their capacity needs for the effective implementation of the AfCFTA in relation to the operationalization of the Agreement.
Some important questions needing immediate responses include the following: (1) to what extent are countries prepared to eliminate tariffs on 90 percent of their goods when they ratify the AfCFTA? (2) to what extend is the private sector knowledgeable about the AfCFTA and its opportunities? (3) What are the institutional and human capacities required for countries to successfully implement and fully benefit from the AfCFTA?
To tackle the issues and ensure a successful implementation of the AfCFTA, the African Capacity Building Foundation (ACBF), the African Union’s Specialized Agency for Capacity Development, is calling for and proposing the conduct of countries’ readiness assessments. The aim is to assess the capacities required and propose ways of optimizing and benefiting from the AfCFTA as well as design interventions that can strengthen the identified country-level capacity gaps.
Conducting such an assessment is important for at least three reasons. First, the assessment will support countries to confirm the appropriate preparations and take actions for areas that were overlooked or require strengthening to ensure that the implementation of the AfCFTA proceeds smoothly. Second, the findings and recommendations from the assessment will culminate into a Capacity Development Plan that would inform the specific costed capacity interventions for the continent, along with the roles of various players, to assist African countries in benefitting fully from the AfCFTA. Third, beyond the assessment exercise which will serve as a basis for African policy makers and stakeholders to understand their countries’ readiness in implementing the AfCFTA agreement, multidisciplinary technical advisory teams can be established to support countries.
The country readiness assessment will complement the work done by ACBF on the capacity requirements and capacity development plan for Agenda 2063 – as well as the study on the AU/OAU Agreements which shows implementation capacity challenges. Based on its experience in building human and institutional capacities across Africa in the past 28 years, ACBF’s contribution to the successful implementation of the AfCFTA as per its mandate will be to ensure that countries and stakeholders have the required capacities. The assessment will further serve as a scientific tool and provide a basis for the strengthening of the human and institutional capacities toward the success of the AfCFTA.