(MENAFN - Morocco World News) Rabat – At a free trade summit this week in Kigali, Rwanda, African leaders have said to be poised to sign a free trade zone deal that would unite and integrate the markets of all 54 member states of the African Union.
According to AU estimates, the deal will bring about the creation of a market of 1.2 billion people living in the continent, including, most essentially, a gross domestic product of $2.5 trillion, leading some observers to argue that should the deal be signed and implemented according to AU's initial plans, it would culminate in the creation of the biggest free trade zone ever since the establishment of the World Trade Organization (WT0) in January 1995.
Expected to unite the 54 AU member states in a tariff-free trade zone, the project is said to constitute a founding pillar of the Africa 2063 agenda, an AU strategic study that gives prominence to continental integration and intra-Africa exchanges in the continent's bid to encourage inclusive growth and sustainable socio-economic development.
Many leaders who represented their countries at the Kigali summit have said that not only will an Africa free trade zone help the continent to diversify its economic activities, it will also, in the process, shield African economies from the price volatility so pervasive in the commodity exports market traditionally associated with African economies.
And so, despite the last-minute decision by Nigeria and Uganda to pull out from the Kigali summit, leading many observers to predict major setbacks in the implementation of the continental free trade dream, the general sentiment among the continent's leaders is that the need to encourage and boost intra-African exchanges has never been this urgent. 'Less than 20% of Africa's trade is internal,' said Rwanda's Paul Kagame commenting on the necessity of enlarging intra-African exchanges. But, he explained, 'Increasing intra-African trade does not mean doing less business with the rest of the world.'
Morocco's African Cooperation delegate minister Mohcine Jazouli, who was part of the Moroccan delegation at the summit, echoed the same sentiments in an interview he gave on the sidelines of the conference. The Moroccan minister spoke in terms of a 'prosperous, strong, and interdependent Africa.'
While the ratio of intra-continental exchanges reaches an impressive figure of 64% in Europe, and 52% in Asia, Africa's is only 13% at present, the Moroccan minister said, adding that it is now more than ever necessary to 'encourage regional integration and promote innovative and smart mechanisms that will create a tariff-free, responsible, and inclusive Africa.' Morocco, which signed the agreement, as it is in perfect harmony with the North African country's Africa initiative that gives prominence to South-South Cooperation, has no qualms that the deal will bring about prosperity and economic development at the continental level.
Speaking yesterday as a panelist at the Kigali summit, South Africa's Cyril Ramophosa also lauded the merits of a prospective continental free trade zone. For the South African president, the deal will create a more conducive environment for trade and investments for the continent as a whole.
Mr. Ramophosa also said that the effective implementation of such a continental agreement would signal a new dawn in unleashing the entrepreneurial and creative capacities of the continent, especially as a free trade zone would entail the promotion of an integrated market through agricultural developments, structural innovations, and the free movement of persons, goods, and services.
'Perhaps the moment could have come for us to create a single African currency. Our focus should not be on our individual countries but on the continent as a whole to unlock great opportunities and capabilities,' said South Africa's president speaking in terms of 'ridding Africa of its colonial mentality.'
Despite sure challenges ahead, especially with Nigeria's current stance towards the deal, studies have unanimously found that, in the long run, the free trade zone would benefit the continent in its entirety. A UN-sponsored twenty-three-page study has estimated, for example, that the continental agreement is 'an important step towards integrating economies of African countries, boosting intra-African trade and attaining sustainable development in the continent.'
In concrete terms, said the study, the deal could spur, by 2022, an increase of 52% in intra-African trade, which would translate into a financial benefit of about $35 billion.
The study however warned that financial benefits associated with the implementation of the deal will experience a skewed distribution among national economies in the continent. For all these warnings, however, African leaders remain convinced that this is a significant and necessary step towards the realization of the AU's Panafrican aspirations of a developed and strong Africa.