Photographer: issue Sanogo / AFP / Getty Images
Photographer: issue Sanogo / AFP / Getty Images
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The first goods will start to flow under a free trade pact for Africa on Friday, the result of more than five years of negotiations to lower cross-border tariffs.
The deal comes at a time when trade tensions are on the rise in much of the rest of the world. The 55-nation Africa Union marked the occasion with a ceremony that took place just hours after the UK left the single market of the European Union and a new post-Brexit trade agreement entered into force.
It is “a day when we take Africa one step closer to a vision of an integrated Africa, a vision of an integrated market on the African continent,” said Wamkele Mene, the Secretary General of the African Continental Free Trade Area, at the event. .
The treaty aims to reduce or eliminate cross-border tariffs for most goods, facilitate the movement of capital and people, promote investment, and pave the way for a continent-wide customs union. The bloc has a potential market of 1.2 billion people with a combined gross domestic product of $ 2.5 trillion, and could be the world’s largest free trade zone by area when the treaty becomes fully operational by 2030.
The deal will help the continent recover from the “devastating impact” of the coronavirus pandemic, said South African President Cyril Ramaphosa, who holds the AU’s rotating presidency.
Intra-African trade fell to 14.5% of the total in 2019 from 15% the year before. The free trade pact could bolster the share to 22%, and intra-continent trade could soar to more than $ 231 billion, even if all other terms remain unchanged, the African Export-Import Bank said. report published December 15. Internal shipments accounted for 52% of total trade in Asia and 72% in Europe, according to data from Afreximbank.
Read more: As the world sways on free trade, Africa is embracing it: QuickTake
All but one of the 55 countries recognized by the African Union have signed to join the area and more than half have ratified the accord. Eritrea, which has a largely closed economy, is all that remains.
The pact will help Africa industrialize on a large scale, said President Nana Akufo-Addo of Ghana, the host country of the bloc’s secretariat.
Any outstanding issues related to the bloc’s various operational tools, such as an online rate negotiation platform and digital payment and settlement system, would be finalized and operational by the end of March, Akufo-Addo said.
(Updates with comments made at the launch ceremony from the third paragraph.)