Arusha. Ratification by Tanzania of the African Continental Free Trade Area (AfCFTA) agreement will boost the country’s foreign trade.
Business analysts say it is set to serve as a platform that will raise Tanzania’s trade with Africa which currently stands at 15 percent.
“About 80 percent of our trade is with countries outside Africa,” said an economist based in Arusha who hailed the move. The pact, which was ratified by the government on Thursday last week, will boost trade by creating more export opportunities.
The anticipated trade rise, especially with the land-locked neighbours, will likely take advantage of upgraded transport infrastructure; roads, railways and maritime.
Tanzania is the last but one of the six East African Community (EAC) partner states to have ratified the agreement signed by most African Union member states in 2018.
Four other members of the bloc; Kenya, Uganda, Burundi and Rwanda appended their signatures at different times between 2019 and this year.
Besides creating a bigger market for the country’s produce, AfCFTA would also open gates for the country’s human capital due to free movement of labour. EAC secretary general Peter Mathuki hailed the move by Tanzania and Burundi (the latter ratified in June 2021), saying it would access East Africans to a larger continental market. AfCFTA, he noted, will increase EAC’s exports to African countries outside the six nation bloc but also trade with the rest of the world.
“It will also improve movement of people across Africa, advance trade and development and put the EA region in a better position to trade with the rest of the world,” he said.
Dr Mathuki said ratification of the AfCFTA agreement by Tanzania and Burundi would expedite the implementation of the agreement.
He added that the bloc had almost finalised its tariff offers in addition to the schedules of liberalisation of trade in services. He added it was the expectation of the regional body that the pact will result in the lowering of business costs and promotion of the local content. The East African Business Council (EABC), on its part, said the projected 3.6 percent growth for the EAC this year would boost implementation of AfCFTA.
“There is hope and optimism on growth of trade and investments,” said Mr John Bosco Kalisa, the executive director of the Arusha-based regional business body.
He stressed the importance of strengthening public-private dialogue on AfCFTA, digitalisation of transport infrastructure and elimination of trade barriers. South Sudan is yet to ratify the pact which it signed in 2018.
AfCFTA became operational in January this year, targeting a consumer market of 1.3 billion people.