President Cyril Ramaphosa says South Africa will become a signatory to the African Union’s agreement on the African Continental Free Trade Area (AfCFTA).
The Presidency said South Africa held off on signing the actual agreement until legal and other instruments associated with AfCFTA are processed and ratified by South African stakeholders and Parliament.
Forty-four African countries signed the agreement establishing the AfCFTA in Kigali, the capital city of Rwanda on Wednesday.
While the President did not sign the crucial agreement at the African Union (AU) Extraordinary Summit, as a demonstration of South Africa’s “unequivocal commitment” to this continental venture, he did sign the Kigali Declaration for the Launch of the African Continental Free Trade Area during a plenary session of the summit.
The AfCFTA is aimed at deepening African economic integration by promoting agricultural development, food security, industrialisation and structural economic transformation through single-air continental transport market with free movement of persons, capital, goods and services.
The envisaged AfCFTA is designed to combine market integration with industrial and infrastructure development to address Africa’s productive capacity.
This will remove supply-side constraints, promote the diversification of Africa’s export base from dependence on raw materials to value-added products, as well as alleviate the chronic infrastructure deficit on the continent.
Besides offering an opportunity to create larger economies of scale, a bigger market and improve the prospects of the African continent to attract investment, the AfCFTA will provide new export opportunities for South African products and services in West Africa and North Africa.
According to the Department of Trade and Industry, the AfCFTA is being pursued under the development integration approach.
This approach combines market integration with industrial and infrastructure development to address Africa’s productive capacity and supply side constraints. It is also expected to facilitate the movement of goods and services among African countries, resulting in harmonisation of customs documentation and processes thus enhancing trade facilitation.
The AfCFTA will make Africa the largest free trade area created in terms of the number of participating countries since the formation of the World Trade Organisation with a potential to create an African market of over 1.2 billion people with a Gross Domestic Product of 2.5 trillion U.S. dollars.
President Ramaphosa welcomed the adoption of the AfCFTA, saying it is a “new beginning for the continent that will catapult African countries and companies to much higher levels of growth”.
“This is an opportunity that is going to yield great benefits for all countries on the continent as well as big business, small companies and micro-traders,” President Ramaphosa said.
In remarks prepared for delivery to the summit, in his capacity as the Chair of the South African Development Community, President Ramaphosa said the trade-focused Kigali Summit was a “forward step in the arduous journey to translate the African Continental Free Trade Area legal instrument into an effective conduit for increased trade and investment across the African continent”.
He urged that the African Continental Free Trade Area provide new and meaningful trade and investment opportunities across the African continent.
“Africa’s vulnerabilities and limited participation in global trade are indicative of its traditional reliance on the export of raw commodities and the import of value-added products,” President Ramaphosa said.
On the sidelines of the summit, President Ramaphosa paid a courtesy call on Rwandan President Paul Kagame.
The two Presidents held discussions on strengthening bilateral relations and strengthening cooperation on continental and global questions.
President Ramaphosa served as chair of an AfCFTA Business Forum on the financing of intra-African trade, before attending a welcome dinner hosted by President Kagame in honour of visiting Heads of State and Government. – SAnews.gov.za