An office of the African Continental Free Trade Area (AfCFTA) was opened in New Delhi at the Ghanaian Embassy, where several Indian companies committed to enter Africa and take advantage of the free trade agreement, which, when implemented, aims to raise intra-African trade by 52.3 per cent.

The African Continental Free Trade Area (AfCFTA) agreement time to  create the largest free trade area in the world measured by the number of countries participating.The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion.

It has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.

African Continental Free Trade Area (AfCFTA

• The African Continental Free Trade Area (AfCFTA) is a free trade area founded in 2018, with trade commencing as of 1 January 2021.
• It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations.
• The free-trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization.
• Accra, Ghana serves as the Secretariat of AfCFTA
• The agreement was brokered by the African Union (AU) and was signed on by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018.
• The agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent.The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent by 2022.

In March 2018, at the 10th Extraordinary Session of the African Union on AfCFTA, three separate agreements were signed: the African Continental Free Trade Agreement, the Kigali Declaration; and the Protocol on Free Movement of Persons. The Protocol on Free Movement of Persons seeks to establish a visa-free zone within the AfCFTA countries, and support the creation of the African Union Passport

Significance:

• AfCFTA seeks to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Continental Customs Union and the African customs union.
• It establishes the largest free trade area in the world since the creation of the World Trade Organization in 1995.
• The scope of AfCFTA is large. The agreement will reduce tariffs among member countries and cover policy areas such as trade facilitation and services, as well as regu­latory measures such as sanitary standards and technical barriers to trade. Full implementation of AfCFTA would reshape markets and economies across the region and boost output in the services, manufacturing and natural resources sectors.
• As the global economy is in turmoil due to the COVID-19 pandemic, creation of the vast AfCFTA regional mar­ket is a major opportunity to help African countries diversify their exports, accelerate growth, and attract foreign direct investment.

Significance for India:(India-Africa)

An office of the African Continental Free Trade Area (AfCFTA) was opened in New Delhi at the Ghanaian Embassy, where several Indian companies committed to enter Africa and take advantage of the free trade agreement, which, when implemented, aims to raise intra-African trade by 52.3 per cent.

India is Africa’s third largest trading partner.India’s engagement with African nations remains at three levels: Bilateral, Regional and Multilateral.

• Higher trade levels can facilitate economic growth for Indian companies and transform domestic economies. The Indian office of AfCFTA in New Delhi will support the African efforts in elevating the potential impact it will create on India-Africa trade and bilateral investments.
• An increase in Indo-African trade will drive the structural transformation of economies from low productivity and labor-intensive activities to higher productivity and skills intensive industrial and service activities where India with its rich human potential can contribute to a great extent

• African countries want India to help in mechanising agriculture, build social and physical infrastructure and provide more vaccines.

• Africa is already an important economic partner for India with total annual merchandise trade estimated at $70 billion or nearly a tenth of our global trade.

• Africa still has unfulfilled demand for Indian commodities, especially foodstuff, finished products (automobiles, pharmaceuticals, consumer goods) and services such as IT/IT-Enabled Service, health care and education, skilling, expertise in management and banking, financial services and insurance.
• Africa is a continent which receives nearly 20% of our pharmaceuticals. Many of our Pharma companies have established units in various parts of Africa, including Ethiopia, Uganda, DRC, Zambia and Ghana.
• Our medicines and medical equipment such as Bhabhatrons and phototherapy machines are saving lives in Africa. Many of our hospitals have entered into joint ventures for establishing health care facilities.
• India is also helping the African countries to bridge the digital divide. “We have launched 2nd phase of the Pan Africa e-Network project – e-VidhyaBharati and e-ArogyaBharati Network Project (E-VBAB), which aims to provide 5 years free tele-education to students, free medical education to doctors/nurses/paramedics and free medical consultancy.