The Africa Free Trade Agreement: What it Means for Eritrea
The Africa free trade agreement (AfCFTA) is a historic trade deal that paves the way for the continent`s economic integration. The agreement was signed by 44 African countries on March 21, 2018, in Kigali, Rwanda, and came into force on May 30, 2019. Eritrea joined the agreement on December 11, 2020, becoming the 38th country to ratify the agreement. This article explores what AfCFTA means for Eritrea and its economy.
What is the Africa Free Trade Agreement?
The Africa free trade agreement aims to create a single market for goods and services, facilitated by the movement of people and capital across the continent. The agreement seeks to boost intra-African trade by eliminating tariffs on 90% of goods traded among member states. It also seeks to address non-tariff barriers, such as customs procedures, technical barriers to trade, and sanitary regulations.
The benefits of AfCFTA for Eritrea
AfCFTA presents several potential benefits for Eritrea, including:
1. Increased intra-African trade: Eritrea can now access a market of 1.2 billion people across 54 countries, creating an opportunity for increased trade and economic growth.
2. Boost in exports: Eritrea can increase its exports of goods and services to other African countries, as tariffs and non-tariff barriers are eliminated.
3. Diversification of the economy: Eritrea can diversify its economy to take advantage of new opportunities presented by the AfCFTA, including in sectors such as manufacturing, agriculture, and services.
4. Job creation: Increased trade and economic growth can lead to job creation, reducing unemployment and poverty in the country.
Challenges and considerations
While AfCFTA presents several potential benefits for Eritrea, there are also some challenges and considerations to keep in mind:
1. Infrastructure: Eritrea`s infrastructure remains underdeveloped, which could impede its ability to take advantage of the new trade opportunities presented by AfCFTA.
2. Competition: Increased trade could result in increased competition, which could negatively impact some domestic industries.
3. Implementation: AfCFTA`s success will depend on its effective implementation, and Eritrea will need to develop the necessary policies and infrastructure to ensure it can benefit from the agreement.
The Africa free trade agreement presents a historic opportunity for Eritrea to increase its trade, diversify its economy, and create jobs. While there are some challenges and considerations, Eritrea`s ratification of the agreement is a significant step forward in its economic integration with the rest of the continent. With effective implementation, AfCFTA could transform Eritrea`s economy and contribute to the country`s long-term development.