Toluwalase is an Associate in one of Nigeria’s leading top-tier…
After years of preparation, and a postponement owing to the COVID-19 pandemic from its original start date in mid-2019, The Federal Executive Council (FEC) ratified Nigeria’s membership of the AfCFTA on the 11th of November 2020 and the AfCFTA eventually commenced on 1st January 2021.
In order to ensure a smooth running of the free trade area, at its launch, five operational instruments that will govern the AfCFTA were activated, namely; the rules of origin, the online negotiating forum, the monitoring and elimination of non-tariff barriers, a digital payment system and the African Trade Observatory. These operational instruments will guarantee, to a very large extent, the smooth operation of the AfCFTA.
The free-trade area is said to be the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization (WTO).
The goal of the AfCFTA is to establish a single market for goods and services across the 54 countries, allow the free movement of business travellers and investments, and create a continental customs union to streamline trade and attract long-term investment with one of the major objective of the AfCFTA been to reduce tariffs on 90% of all goods.
The creation of this single market will help deepen the economic integration of Africa and also act as a significant driver to Africa and Nigeria’s economic growth. The free trade area will help to enhance e economic growth and job creation for Africans and also help to shape the future of International Trade and Investment of Africa by accelerating Intra-African trade and boosting Africa’s trading position in the global market. The free trade area will also strengthen Africa’s common voice and policy space in International trade negotiations.
Furthermore, the free trade area will enhance the competitiveness of member states within Africa and in the global market. Nigeria has been the largest economy and population in Africa, with more than $500 billion in GDP and a population of about 200 million will greatly benefit from the AfCFTA has the large market size affords companies the opportunity to increase their capacity and expand into other African countries. This enables investors to benefit not only from the Nigerian market but from other countries on the continent as well.
Although the AfcFTA is a welcome development, the full execution of the Agreement may take some time as it is paramount for countries to negotiate aspects of the Agreement such as trade, dispute settlement processes, tariffs and intellectual property rights. Clearly, the AfCFTA is a significant driver that will boost Africa and specifically, Nigeria’s economy. It is however important, for the Nigerian government to put in place measures and policies that will ensure that all relevant Industries and stakeholders necessary for the successful execution of the AfCFTA are properly implemented. Nigeria can also draw lessons from other advanced countries such as the North America Free Trade Agreement (NAFTA) and The United States-Mexico-Canada Agreement (USMCA) in the implementation of the AfCFTA.
What's Your Reaction?
Toluwalase is an Associate in one of Nigeria’s leading top-tier commercial law firm where she advises Clients and provides legal solutions to commercial disputes. She equally represents local and international Clients in superior Courts of record in Nigeria in respect of commercial disputes and transactions. She is a graduate of the prestigious faculty of Law, Obafemi Awolowo University, Ile-Ife. She was called to the Nigerian Bar in 2015 and has since been in active legal practice. She is a member of the Nigerian Bar Association, Member of the Nigerian Bar Association Section on Business Law and Member of Capital Market Solicitors Association of Nigeria. With the consciousness of being a global practitioner, Toluwalase became a friend of the Toronto Lawyers Association (TLA). Toluwalase is passionate about FINTECH and the sustainability of SMEs in Africa. She is a fashion and law enthusiast, business analyst, trainer and conference speaker.