The Continental Free Trade Area (CFTA) provides Rwanda a viable avenue to grow its exports base and should be prioritized ahead of trade pacts with other regions out of Africa, the United Nations Economic Commission for Africa (UNECA) says.

Andrew Mold, the UNECA acting Director for Eastern Africa, said Friday that there is little evidence of diversification on the global market, as African producers have for decades been unable to compete favourably with producers from Europe, Asia and America.

“International trade has been frustrating for Africa;  so the CFTA is expected to boost intra-Africa trade in a significant manner. Trade has not been going in the direction we would like to see in terms of diversification despite the numerous trade treaties Rwanda and East Africa have with the developed world,” Mr Mold said during his presentation to government officials and the private sector.

“Despite the existence of the World Trade Organization, farmers from Africa have not reacted well, and there is an evident lack on the supply side from Africa.”

UN statistics back his argument, showing that Africa’s share of global trade floated at around 3 percent over the last decade.

Failures

Looking at the failure of current trading arrangement (such as AGOA with the US and the Cotonou Agreement with EU) to produce desired outcomes across Africa , Mr Mold argues that Rwanda is best placed to tap into Pan-African politics presented by the CFTA and benefit by trading more with Africa.

“Exports to the US from Rwanda, through AGOA, make up for about only $1 million annually, while agreements with Europe, India and Asia have not been as successful as we hoped since 2010,” he said.

Over the last decade, Africa has experienced the lowest intra regional trade, hovering between 10 percent and 13 percent compare to other continents.

Intra-Africa trade is expected to grow to at least 25 percent by 2022, but if coupled with reforms under CFTA, it could double to 52 percent, UNECA projections show.

Rwandan officials say that the CFTA will simplify trade negotiations with like-minded producers on the continent as opposed to working in a far larger World Trade Organisation which tends to favour continents that are at a higher level of industrial growth.

“Under the CFTA, a group of African countries can have significantly greater political weight than nations have individually. The group may have more clout in negotiating with WTO and other multilateral players,” Alice Twizeye, Director of External Trade at the ministry of Trade and Industry said.

“The CFTA will give African consumers and industrial buyers a wider selection of goods and services not available previously. It will enable buyers to acquire goods and services more affordably, following the lowering of trade barriers and tariffs.”

Limitations

Although the continent is full of ambition about the CFTA, experts say that many African countries still struggle with limited resources, which may weaken and uneven their benefits from CFTA.

Doubts also exist over the future of national sovereignty, an aspect especially pumped up by nationalists who argue that the CFTA will corrode their country’s sovereign interests.

Rwanda is among only six nations that have completed the ratification of the CFTA, out of the 44 nations that signed the agreement in March this year.

The others that ratified the agreement include Kenya, Niger, Ghana, Chad and Swaziland.

Entry into force of CFTA requires at least 22 countries to ratify the agreement.