International Monetary Fund (IMF) has welcomed the African Continental Free Trade Area (AfCFTA/ CFTA) agreement that was signed by 44 African countries at the 10th extraordinary Summit of the African Union Assembly on 21 March 2018 in Kigali, Rwanda.
Speaking at a press briefing IMF’s African Department Director, Abebe Aemro Selassie said that the IMF strongly welcomes the agreement that was reached by African leaders in Kigali.
Selassie went on to say that when fully implemented the CFTA will deepen and expand the markets in which African firms can trade.
“You know, trade agreements are always difficult issues and they have some domestic construction for and some against. But overall, we feel that the CFTA is a very important initiative and one which may African countries will benefit from,” Selassie said.
Selassie went on to say that the CFTA, which is expected to remove trade barriers, like tariffs and import quotas thereby allowing a free flow of goods and services between its members, when fully implemented will deepen and expand the markets in which African firms can trade.
“So, we think that the CFTA when fully implemented and if coupled with reforms through non-tariff barriers, facilitating infrastructure to allow goods to move with each other should facilitate and allow connecting markets and, you know, deepen and expand the markets in which African firms can trade. So we strongly welcome it,”IMF Director said.
“Just to step back a little bit, you know, in recent years, we have seen a significant improvement in inter Africa trade. It has gone up from below 10 percent to now almost 20 percent of the regions trade.”
“And what is interesting about the trade is that much of what Africa trades with each other tends to be more processed, more manufacturing type goods. Exactly the kind of more diversified exports that our countries are seeking,” Selassie went on.
Although CFTA has been welcomed by the IMF, other countries did not sign with the Nigerian President stating that the agreement would make Nigeria a dumping ground and jeopardise the security of the nation.