TANZANIA – The government of Tanzania has ratified the agreement establishing the African Continental Free Trade Area (AfCFTA), joining a pact connecting countries with a total gross domestic product of US$3.4 trillion.
AfCFTA was first opened for signing in April 2018 but came into application in 2019 after the requisite minimum of 21 of the 55 member states ratified it.
Tanzania had not formally joined although former President John Magufuli signed on the agreement in 2019.
After signing, parliamentary approval is required for the ratification of the agreement.
Its East Africa counterparts Kenya, Uganda, Rwanda, and Burundi have already ratified the agreement.
The deal, signed by 54 of the African Union’s (AU) 55 member states, commits countries to 90% tariff cuts within a five-year period.
Eritrea is the only country yet to join the AfCFTA.
Of the 54 countries that signed the deal, only 38 countries including Tanzania have ratified the treaty.
Intra-African trade under the AfCFTA is expected to grow by over 50%, integrating the African market beyond national economies through promoting the free movement of labour and investments.
The AfCFTA drastically relaxes rules of origin and non-tariff barriers, allowing traders of all sizes to explore the 1.3 billion people market across the continent.
Henceforth, Africa can trade on over 81% of products on preferential terms, after 41 countries submitted their tariff offers. Further negotiations on terms and tariffs will close by July 2021.
The AfCFTA is expected to improve intra-African trade which currently stands at between 16% and 18%.
Increasing this share is expected to increase value addition, help create jobs and boost incomes.
Further, it is expected to champion value addition, reducing the continent’s exposure to volatility emanating from trading in raw materials, as well as cutting Africa’s overreliance in global supply chains proven unsustainable by the COVID-19 pandemic.
The AfCFTA is the World’s largest free trade area since the formation of the World Trade Organization (WTO).
The ratification is an indicator of President Suluhu’s intention to return the country to regional integration.
The ratification comes barely two months after the AfCFTA secretary General Wamkele Mene held discussions with President Samia Suluhu Hasan.
Mr. Mene sought the assurance of Tanzania’s commitment to the agreement to which President Samia promised to join “very soon”.
Liked this article? Subscribe to DealStreet Africa News, our regular email newsletter with the latest news, deals and insights from Africa’s business, economy, and more. SUBSCRIBE HERE
