By NOELA EBOB BISONG
A free-trade zone (FTZ) is a class of special economic zone; a geographical space where goods and services may be landed, stored, handled, manufactured or re-configured without any payment of customs duty. The African Continental Free Trade Zone launched by the African Union Summit in Niamey, Niger on July 7, 2019 is said to bring many advantages to the continent, by promoting African economic integration through establishing a common market. The African Free Trade Zone it should be recalled was established on March 21st, 2018 and its main instruments include: the institutional framework, the protocol on trading in goods and services and the protocol on rules and procedures on the settlement of disputes among member countries.
According to the permanent representative of the African Union in Cameroon, Dr. Jean Gérard Mezui M’ella the move is meant to strengthen capacity, development and economy; the objective, he says, is to remove economic barriers, harmonise customs regulations, and ensure the same governance and passport for Africa. He maintains it’s a Win/Win situation for every member country of the zone. Dr. Jean Gérard Mezui says though there is an effective free market in the zone, there is need to harmonise regulations, said to take place in a year and six months period.
Experts hold that the essence of the launch of the African Free Trade Zone is a safety valve for economic growth, continental integration and economic autonomy.
Already, 27 African countries have approved the African Free Trade Zone. The initiative, expected to deepen African integration through a common market is also expected to bring into existence a common currency.
Experts believe that though the move is an opportunity to stimulate economic growth and development, the zone will be effective only if issues like the legal instrument, to allow the free movement of goods/people/services/capital is adopted by member countries; harmonization of the sectorial policy, as well as the employment policy to ensure that people can move freely and work; and also that the monetary policy be harmonised.
The Free Trade Zone requires members to remove tariffs from 90% on goods, allowing free access to commodities, goods and services across the continent. It is said to be the largest in the world in terms of participating countries, with a ready market of over 1.2 billion people. The African Free Trade Zone it is also hoped, will enable African economies to present a common front like the European Union. Experts estimate that the Free Trade zone will boost intra-African trade by 52% by 2022, generate 300,000 direct jobs and more than 2 million indirect jobs in the short term. Stimulation of competition and subsequent improvement in quality of products offered in line with the respect of norms and standards are also expected.
It should be noted that the African Free Trade Zone comes after regional blocs like SADC, ECOWAS and ECCAS have already been fighting to ensure economic integration in the African continent.