Continental Free Trade Area of Africa: Challenges and Prospects

Abstract

The Africa countries signed Abuja treaty, which entered into force in 1994, with the aim establish an African Economic Community composed of all African states using preexisting Regional Economic Communities as a building block over a period of 34 years and using six stages of integration. Despite such endeavors, however, the Africa’s economy has remained fragmented, intraregional trade has remain low, and the integration has been shallow, inter alia, due to low level of infrastructure development, complexity arise out overlapping multiple membership in RECs, low industrial production, lack sufficient trade finance, and the state-centric nature of the integration efforts. The decision to establish the Continental Free Trade Area and Action Plan Boosting Intra-Africa Trade (BIAT) was adopted as means of fast tracking the integration process and boosting intra-Africa trade. The absence of clear rule on the status of RECs and the relationship between the existing regional economic communities and the to-be-formed African Economic community has also contributed to the uncertainty in the integration process and “spaghetti bowl effect” of RECs Free Trade Area . In view of these challenges, the formation of the Continental Free Trade Area is one of timely grand initiatives of African to solve the problem of African integration process. The multilateral trading system crisis with death of Doha Development Agenda and profleration of Mega Regional Agreements make Africa’s Continental Free Trade Area a matter of necessity to survive in competitive globalized world. Despite the fact the CFTA’s potential is promising, the task at hand is also immense. In light of the difficulties encountered by most of Africa’s RECs in advancing their integration processes at the sub-regional level, one quickly realizes that establishing a functional single market between all 55 African Union (AU) member states will be uniquely complex. Finally yet importantly, the CFTA alone may not resolve the multifactor Africa’s integration problem. Therefore, so as maximize the benefit of the CFTA, its operation shall be complemented by other initiatives like Action Plan on BIAT, NEPAD, and PIDA so as solve the others bottleneck of Africa’s integration process like political instability, low industrial production, poor infrastructure and trade finance which may not addressed by the CFTA agreements.