3 November 2018

Uganda Now Close to Ratifying AfCFTA

Uganda's Cabinet approved the ratification of the African Continental Free Trade Area (AfCFTA) agreement on October 29, kick-starting a process that will see Uganda join Rwanda and Kenya, which already ratified the document.

"The agreement will create a single market for goods and services and the movement of business persons in accordance with Agenda 2063," said Ofwono Opondo, executive director of the Government Media Centre.

The AfCFTA will promote economic, social and cultural development. Rwanda's President Paul Kagame pushed for the signing of the agreement in March, at an African Union meeting in Kigali. As a result, 44 countries signed the agreement, which seeks to turn the continent into a single market by eliminating both tariff and non-tariff barriers.

Africa boasts a combined GDP of $3.3 trillion. Official figures show that total signatories now stand at 49 countries, but only six have gone through the full process of ratification.

This means the AfCFTA is yet to come into force, as it has to be ratified by a minimum of 22 countries. The six ratifications so far are by Rwanda, Kenya, Niger, Ghana, Chad and Swaziland. South Africa and Uganda have started the process of ratification.

Foreign Affairs Minister Okello Oryem said the next step will be the signing of the agreement by either President Yoweri Museveni or someone authorised by him. After this, instruments of ratification will be deposited with the African Union.

"Although Uganda's Constitution states that treaties may be ratified by the president or anyone he authorises, it is good practice to seek Cabinet's and parliament's approval, before going ahead to sign," said Emmanuel Bagyenda, an international law lecturer at Makerere University. He said Uganda has a dual system, where ratification has to be followed by parliamentary approval before an international agreement can be enforced.

Forming a continental free trade area has been on the cards since June 1991, when the Abuja Treaty establishing the African Economic Community was first adopted.

Frank Dafa, policy specialist at the Confederation of Tanzanian Industries, said countries are still reluctant to remove import duties for each other. He said that at the EAC level, coming up with a revised common external tariff structure has stalled because partner states are not willing to cede revenue.

He said the warming up towards integration at the African Union level will only last as long as taxation and loss of revenue aren't on the cards.

Nigeria, which has yet to sign the AfCFTA, last weekend hosted a forum in Lagos to discuss the benefits of the AfCTA. Representatives from African governments gathered in Lagos to discuss the process for realising a single market at the Africa Trade Forum, co-organised by the United Nations Economic Commission for Africa, Rockefeller Foundation and the AU Commission.

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