Continental free trade agreement a ‘long journey’
Slightly dampening the excitement building following President Mokgweetsi Masisi’s announcement Botswana will sign the African Continental Free Trade Agreement (AfCTA), economists have warned it will be years before the country reaps any benefits.
In his first State of the Nation Address (SONA) last month, President Masisi indicated Botswana will sign the agreement at the African Union (AU) General Assembly in January 2019 after all the outstanding issues have been resolved.
However, Dr. Keith Jefferis, Managing Director at Econsult told Voice Money the signing of AfCTA does not necessarily mean much for the naion’s immediate future.
He believes what will follow is a marathon of negotiations before any practical implementation.
“It think it’s going to be a long period before we see any tangible results – and again it will depend on a number of factors such as tariff barriers,” stressed the Econsult economist.
Just like Jefferis, Research Manager at FNB Botswana, Moatlhodi Sebabole is of the view that this is going to be a drawn out process.
He described next month’s signing event as merely ‘an act of goodwill between the parties involved’.
“From there those who have ratified will have to make (the agreement) practical for implementation,” he explained, adding that due to a number of blocs within the continent, it will take years to complete negotiations and implement the agreement.
Sebabole says the agreement essentially gives parties access to tap into the continental market without tariffs or duties paid.
On paper, the AfCTA presents a number of opportunities to markets of over 1 billion people living on the continent and offers a potential value of 1 trillion US dollars in trade across the continent.
Once in operation, the agreement is expected to make movements of goods and services across the continent considerably easier.
Despite all these staggering expectations, economists have cautioned against getting hopes high as it will take years before such benefits can be enjoyed.
44 countries signed the agreement during the AU summit in Kigali, Rwanda earlier this year, while others, including Botswana, stayed away from signing due to consultations that were to take place first.
Based on Masisi’s SONA speech, it appears consultations have been completed as he said the country will sign next month.