European stocks to open lower as investors consider smaller Fed rate cut    Gold up on Iran tensions, firmer dollar limits upside    Oil rises as Middle East Gulf tensions flare, Libya oil field shut    UK envoy apologises for not informing Egypt over flight suspension    Egypt's population reaches 99 million: CAPMAS    Egypt extends state of emergency for three months: Official gazette    In Photos: 1st phase of Roxy Garage inaugurated on the 1,050th National Day of Cairo celebrations    Iran thanks Saudi Arabia for release of its oil tanker Happiness 1: Fars    Griezmann 'cried with joy' at Barcelona move    Japan ruling bloc to keep simple majority in upper house, may get 2/3: NHK exit poll    Arsenal boss Emery happy to be patient in transfer market    Arsenal Next Gen ready to 'take on the world', says youngster Saka    U.S. President Trump relished rally chant, Ocasio-Cortez tells constituents in Queens    Oman urges Iran to let seized tanker depart: State TV    U.S.-South Korea military exercise to proceed: official    Egypt urges nationals to abide by Schengen travel rules    EgyptAir to provide larger aircrafts for Cairo-London route after British Airways suspension: Source    Egypt's investment opportunities to be promoted in Italy    Egypt's Sisi attends graduation ceremony for police cadets    Algeria crowned Africa Cup of Nations Champions after Senegal win    Sisi: Egypt supports development efforts in all Nile Basin states    Egypt's PM supervises implementation of Luxor's Corniche project    After appointing new female judge, will Egypt see more women in courts?    Egypt's PM follows up implementation of Luxor's Corniche development project    Egypt tells citizens that Saudi e-visa not meant for hajj    Algerian team came to Cairo to win AFCON title: Djamel Belmadi    Egypt, Uzbekistan study establishing pharmaceutical plant    Egyptians Brace for Rising Prices Due to Subsidy Cuts    Belgium's Port of Antwerp to develop bunkering activity in Egypt    Sudan's military, opposition sign 1st part of power-sharing deal    Peace with Egypt must be made: Turkey's main opposition leader    King Tut's golden coffin undergoes first restoration since 1922 discovery    Changing dominant narrative of women on stage    Explorations of music, sound, architecture of Islamic Cairo and everyday life    Farewell to Italy's best-loved writer Andrea Camilleri    Parliament Speaker announces end of fourth legislative term    Total of 59,455 expats in Egypt have undergone virus C screening    Renovation of Egyptian Museum to include installing new lighting, display systems    Egypt's parliament starts new NGO law discussion    Egypt's parliament Oks new NGO law    Egypt's parliament's 5th convocation sessions to be aired live: Parliament speaker    Cairo hosts 6th meeting of Egyptian-Sudanese military committee    Egypt inaugurates museum to honor late novelist Naguib Mahfouz    Bookmakers expects Egypt's Mo Salah might miss the year's Ballon D'or award    Fired MP detained pending investigations over corruption charges    Egypt sees national population growth rate to halve before 2052    AFCON quarter-finals: Desert Warriors face Ivorian Elephants in early final    Orange Egypt removes Warda from ad campaign after harassment case    

Thank you for reporting!
This image will be automatically disabled when it gets reported by several people.

Creating an African market
Published in Al-Ahram Weekly on 12 - 04 - 2018

Egypt and 43 other African countries signed the African Continental Free-Trade Area Agreement (AFCFTA) at the African Union Summit meeting held in Kigali, Rwanda, last month.
The signing is considered an important step towards creating a single African market for goods and services with free movement for businessmen and investment, thus paving the way towards accelerating the establishment of an African Customs Union.
The agreement, which should be ratified by the parliaments of the 44 countries within 120 days, is expected to be activated in 2019.
The AFCFTA aims at bringing the 54 members of the African Union together into one large market with a combined population of 1.2 billion people and a total GDP of $2.4 trillion.
Negotations to establish the AFCFTA started in January 2012 during the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union held in Addis Ababa, Ethiopia.
African leaders and government representatives are optimistic and expect the agreement to impact positively on inter-African trade. Minister of Industry and Foreign Trade Tarek Kabil was quoted as saying that intra-Africa trade was expected to increase by 52 per cent in 2022, according to figures released by the United Nations.
Kabil added that signing the agreement paved the way to achieve African economic integration and enhance the sustainable development and growth rates of African states in the light of Africa's Vision 2063 Strategy that has been endorsed by the African Union.
“Signing the agreement is a positive step, but its implementation will not be an easy task,” said Amani El-Taweel, a senior researcher at the Al-Ahram Centre for Political and Strategic Studies.
El-Taweel explained that although the agreement would help in reallocating the continent's resources and supporting intra-African trade, many challenges faced its implementation, among them poor infrastructure. To improve this, Africa would need investment of some $100 billion, according to the African Union.
The agreement also does not include clarification on how member countries can protect their local industries and markets from dumping. This loophole has made some African countries reluctant to sign the agreement.
Ten African Union member states declined to sign the agreement as a result, including Nigeria and South Africa, two of the largest African economies. Nigerian President Muhammadu Buhari said his country would not agree to anything that could undermine local manufacturers and enterpreneurs or lead Nigeria to becoming a dumping ground for finished goods.
“Protecting local industries from dumping is an important concern, not only for countries which did not sign, but for all African Union members,” El-Taweel said.
When all AU member states agree to join the AFCFTA, the bloc of 54 countries will be the largest in the world since the establishment of the World Trade Organisation in 1995. However, the implementation of the agreement is likely to be resisted by multi-national companies, since they currently play a major role in trade exchange with Africa, according to El-Taweel.
“Political instability in some African countries is one more problem that could delay the African Free-Trade Area,” she added.
Experts are confident that Egypt's membership of the AFCFTA is a real chance to boost its foreign trade with African countries. A number of growth opportunities exist for many industrial sectors, such as pharmaceuticals, chemicals, household goods, ceramics, carpets, and military equipment, according to El-Taweel.
However, some Egyptian businessmen believe that Egypt's signing should be followed by actions that will pave the way for Egyptian products to enter new African markets or to expand already existing businesses in African countries.
Khaled Hamza, head of the customs and imports committee at the Egyptian Businessmen's Association, told Al-Ahram Weekly that the private sector should start studying African markets and the potential for Egyptian products in each, so that it is ready when the agreement is activated.
These studies should include the laws and regulations that control these markets. Egyptian businessmen should visit the African countries and hold exhibitions of their products, Hamza added.
To help businessmen increase exports, Egypt's Export Development Authority has signed an agreement with the African Union Commission and the African Bank for Development to hold the first Intra-African Trade Fair in Cairo in December 2018.
The fair will include 500 companies from 50 African countries and is expected to be visited by 10,000 visitors. “The fair aims to help Egyptian businessmen meet and interact with their counterparts in the African countries. It would also be a good chance for them to conclude export deals to the African countries,” said Sherine Al-Shorbagi, head of the Export Development Authority.
According to the Central Agency for Public Mobilisation and Statistics (CAPMAS), the government statistics agency, Egyptian exports to Africa stood at around $1.3 billion, while imports reached around $1 billion, in 2016. Kenya, South Africa and Nigeria are the most important countries in Africa doing business with Egypt.
The relatively low performance of intra-African trade, which currently stands at around 20 per cent of these countries' total, has been attributed to the deficit in trade information and high product concentration.
To develop such trade, the African Union has endorsed an Action Plan on Boosting Intra-African Trade (BIAT), which has identified seven areas that can benefit it, including trade finance, trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade information, and market integration.
The BIAT targets to double intra-African trade flows from January 2012 to January 2022.
The redirection of investment to better utilise the continent's resources could offer tremendous opportunities for growth for it to become the fastest-growing and largest market in the world, with its population projected to double by 2040.

Clic here to read the story from its source.