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The agreement, which entered into force in May, could be a major step for Africa's role in international trade, if the continent can overcome barriers to implementation.
The entry into force of the African Continental Free Trade Area (AfCFTA) on 30 May, after only three years of negotiations, is as an economic, political and diplomatic milestone for the African Union (AU) and its member states, crucial for economic growth, job creation, and making Africa a meaningful player in international trade. But the continent will have to work together to ensure that the potential benefits are fully realized.
A necessary innovation
With its advances in maintaining peace and security, abundant natural resources, high growth rates, improved linkages to global supply chains and a youthful population, Africa is emerging as a new global centre of economic growth, increasingly sought after as a partner by the world's biggest economies. Governments from across Africa have been taking a more assertive role in international markets, including through proactive diversification of trading partners, and the continent remains a strong advocate for the multilateral trading system.
However, this is not yet reflected in outcomes. The African Union does not have observer status at the World Trade Organization, despite diplomatic efforts in the past decade. Africa has less than a three per cent share of global trade, and the growing trend towards protectionism across the global economy may only increase the vulnerability of a disunited Africa. Its fractured internal market means that trade within Africa is lower than for any other region on the globe, with intra-African trade just 18 per cent of overall exports, as compared to 70 per cent in Europe.
The AfCFTA is the continent's tool to address the disparity between Africa's growing economic significance and its peripheral place in the global trade system, to build a bridge between present fragmentation and future prosperity. It is an ambitious, comprehensive agreement covering trade in goods, services, investment, intellectual property rights and competition policy. It has been signed by all of Africa's states with the exception of Eritrea.
It is the AU's Agenda 2063 flagship project, brought about by the decisions taken at the January 2012 African Union Summit to boost intra-African trade and to fast track the establishment of the Continental Free Trade Area. It builds upon ambitions enshrined in successive agreements including the Lagos Plan of Action and the Abuja Treaty. Access to new regional markets and reduced non-tariff barriers are intended to help companies scale up, driving job creation and poverty reduction, as well as attracting inward investment to even Africa's smaller economies.
The signing in 2018 of the instruments governing the Single Air Transport Market and the Protocol on Free Movement of Persons, Right of Residence and Right of Establishment provided another step towards the gradual elimination of barriers to the movement of goods, services and people within the continent.
Tests to come
However, while progress is being made towards the ratification of the AfCFTA, much remains to be done before African countries can fully trade under its terms. The framework for implementation is still under development, and the creation of enabling infrastructure that is critical for connectivity will take time to develop and requires extensive investment.
So, the first test for the AfCFTA will be the level to which Africa's leaders make it a domestic priority, and whether a consensus can be maintained across the AU's member states as the costs of implementation become clear.
There is no guarantee that the gains of free trade will be evenly distributed. They will mainly depend on the extent to which countries embrace industrialization, liberalization of their markets and opening of their borders for free movement of goods and people - policies that some incumbent leaders may be reluctant to implement. Political will to maintain a unified negotiating position with diverse stakeholders, including the private sector, will come under increasing stress.
A second challenge is how the AfCFTA relates to already existing trade arrangements, notably with the EU. The AU has long preferred to pursue a continent-to-continent trading arrangement instead of the bilateral Economic Partnership Agreements being sought by the EU under the African, Caribbean and Pacific (ACP) framework to which, with the exception of Algeria, Egypt, Libya, Morocco, Tunisia and South Africa, all African states belong. The signing of the AfCFTA is one important step towards making this possible.
But there are currently negotiations under the ACP to replace the Cotonou Accord (the framework governing trade between ACP members and the EU, including Economic Partnership Agreements [EPAs], that is due to expire in 2020). Negotiations on the African pillar of the accord are due to take place after the AfCFTA has entered into force. So African states and the AU will face the challenge of balancing their commitment to the ACP bloc with pursuing their own interests.
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And though the AfCFTA should supersede any other agreements, the EPAs or their successors, will continue to govern day-to-day trading, in parallel to the new pan-African market. It is not yet clear how these contradictions will be reconciled.
A new role for the AU?
The AU will need to play an active role as the main interlocutor with Africa´s international trading partners, with the AfCFTA secretariat being the arbiter of internal tensions and trade disputes. The AU´s engagement at continental level has to date revolved mainly around headline political diplomacy, security and peacekeeping. With the continental free market becoming a reality, an effective pivot to economic diplomacy will be critical for growth and development.
With the AfCFTA, the AU has endeavoured to address Africa's unsustainable position in global trade, to stimulate growth, economic diversification and jobs for its growing population. Much will depend on the commitment of African leaders to maintaining a unified negotiating position to implement the agreement and the AU's capacity to effectively move from political to economic diplomacy.
Source: Allafrica.com

Agriculture holds the promise of transforming Tanzania's economy better than any other sector according to the World Bank, but the government must first fix its policies and regulatory issues.
In its 13th Tanzania Economic Update report dubbed Transforming Agriculture, the World Bank bases its argument on the fact that agriculture provides more than 67 per cent of all the jobs in the country and contributes nearly 30 per cent to the country's total GDP.
"The current trends in agriculture and related value chains offer a tremendous opportunity to catalyze private investment, both local and foreign, and raise the incomes of the poor," said World Bank Country Director for Tanzania Bella Bird when he launched the report on December 3.
Tanzania experienced a steady rise of commercialized and more productive small-scale farmers to 25 per cent from 19 per cent between 2008 and 2014. The proportion of farms that were primarily subsistence-oriented and small-scale fell to 31 per cent in 2014 from 43 per cent in 2008.
"Since 2008, there has been a growing number of medium-scale farmers who have opened up opportunities for smallholder farmers through positive spillovers," reads the report.
About 368,000 medium-scale farms were added in the market, creating over 13 million days of hired agriculture workers.
"The 776,473 medium-scale farmers invest in technology and knowledge, and they attract commercial services that can provide a basis for tax revenue. And the effect of this is that small-scale farms on average improved their farming outcomes," said Holger Kray, World Bank agriculture practice manager and co-author of the report.
Agriculture contributes about $1 billion in earnings to Tanzania's foreign exchange kitty, mainly from cash crop exports -- coffee, cotton, sisal, cashew nuts, tobacco and tea.
Source: Allafrica.com

11/ 12/ 2019 - South Africa Power Crisis - Severe Blackouts Shut Down Mines
South Africa is facing severe electricity crisis, causing power cuts and mine closures. President Cyril Ramaphosa has had to cut short his official visit to Egypt and come home to deal with the problem.

South Africa's state-owned energy company Eskom has been struggling to keep the lights on in the country. For the past six days, Eskom has been implementing "load-shedding," whereby power is cut for anything from two to four hours to businesses and households across the country in a bid to relieve pressure on the national grid.
On Monday, the energy firm said it was cutting up to 6,000 megawatts (MW) of power from the national grid after heavy rain and flooding triggered failures at its Medupi coal-fired plant. The problem is not new, as the company has been forced to enforce such power outages intermittently over the past decade.
On Tuesday, South African President Cyril Ramaphosa had to cut short his official visit to Egypt and head back home to deal with the power crisis.
"The ongoing load shedding is devastating," Ramaphosa said in a statement earlier on Tuesday. "The energy challenges in this country will not be resolved overnight." Presidential spokesperson Khusela Diko said Ramaphosa would meet with Eskom executives on Wednesday to be briefed on plans to resolve the crisis.
Loss-making Eskom generates over 90% of the nation's electricity.
Aggravating economic woes
The electricity problems have dealt a blow to the nation's already slowing economy and transportation, among other things. The mining sector, a key part of the nation's economy, has been hit hard, with companies shutting down mines across the country.
Harmony Gold, Impala Platinum and Sibanye-Stillwater all said they had been forced to cut production since Monday because of power shortages.
"There are very few underground mines that operated overnight and will be operating normally today," said a spokesman for the Minerals Council industry body. The mining industry contributed 351 billion rand ($24 billion, €21.65 billion) to the South African economy in 2018, the Minerals Council says, equating to about 7% of gross domestic product (GDP).
John Steenhuisen, leader of the main opposition Democratic Alliance, led a picket outside Eskom headquarters in Johannesburg on Tuesday, saying the "rolling blackouts" threaten to "throw the country's economy over a precipice."
Source: DW

EAST African businesswomen are calling for the establishment of a digital economy to facilitate women doing business in the region.
The women who met here last week under the auspices of the East African Women in Business Platform (EAWiBP) observed that they still lacked skills of doing business using digital economy.
They also decried the lack of regional accreditation for Women in business and the lack trust when doing online business among business women.
"We are calling the six partner states to establish a digital platform for showcasing products and services to boost regional trade and develop an EAC business accreditation policy," outlined Ms Nancy Gitonga, the platform's regional coordinator while delivering the recommendations from women in business focal points from the six partner states at a consultative workshop on mainstreaming gender-related challenges in the EAC regional agenda.
The East African businesswomen opined that creating a database for the service providers as business centre will help them access business services across EAC partner states.
They also rooted for the formulation of a creative technological based service platform for linking farmers and traders for enhancing trade as well as establishing women in business innovation and incubation hubs within the EAC.
"There's limited digital infrastructure that can benefit women small and medium entrepreneurs there it is equally important to have such platforms," suggested the EAWIBP regional coordinator.
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EAWiBP also wants the inclusion of its members in the EAC Common External Tariff(CET) review team.
Among other things, the review team will seek to breathe life into the stalled review of the EAC's (CET), a project that has delayed for over two years after the member states failed to reach a consensus on how to change the three-band tariff structure.
The EAC partner states have failed to reach a consensus in three consecutive meetings, every time going back to do "further consultations" in their home countries.
Talks on the CET dispute which largely revolves around the number of tariff bands to be included in the new taxation structure and the type of goods to be put in each new band, were scheduled to in October this year.
In the same vein, the businesswomen called for the sensitization and awareness creation of women in business on the African Continental Free Trade Agreement (AfCFTA) which came into force in May 30 this year.
The women rooted for funding and building of resources within EAWiBP for dissemination on the AfCFTA policy and capacity building for the women in business to leverage its benefits.
EAWiBP is a forum that brings together business and professional women from across the EAC.
It draws its mandate from the Treaty for the Establishment of East African Community, particularly under Chapter 25 and Articles 121 and 122 and is inspired by the vision of becoming "A Women's Centre of Excellence for Intra and Extra-EAC Trade".
Source: Allafrica.com