Photographer: Issue Sanogo / AFP / Getty Images
Photographer: Issue Sanogo / AFP / Getty Images
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The first goods will begin to flow under a free trade pact in Africa on Friday, the culmination of more than five years of negotiations on reducing cross-border tariffs.
The agreement comes at a time when trade tensions are rising in much of the rest of the world. The 55-nation African Union marked the occasion in a ceremony that came 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 further towards the vision of an integrated Africa, a vision of an integrated market on the African continent,” said Wamkele Mene, secretary general of the African Continental Free Trade Area. , during the event.
The treaty seeks to reduce or eliminate cross-border tariffs on most goods, facilitate the movement of capital and people, promote investment and pave the way for a customs union across the continent. The block has a potential market of 1.2 billion people with a combined gross domestic product of $ 2.5 trillion and could be the largest free trade area in the world by areas when the treaty is 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 rotating presidency of the AU.
Intra-African trade fell to 14.5% of the total in 2019, from 15% the previous year. The free trade pact could strengthen the proportion to 22%, and trade on the continent could increase to more than $ 231 billion, even if other conditions remain unchanged, the African Import and Export Bank said. Export report published on 15 December. Domestic shipments accounted for 52% of total trade in Asia and 72% in Europe, according to Afreximbank data.
Read more: As World Wavers on free trade, Africa adopts it: QuickTake
All but one of the 55 countries recognized by the African Union have signed up to join the area and more than half have ratified the agreement. Eritrea, which has a largely closed economy, is the only obstacle.
The pact will help Africa industrialize on a large scale, said Ghanaian President Nana Akufo-Addo, the host country of the bloc’s secretariat.
All outstanding issues related to the bloc’s various operational instruments, such as an online platform for tariff negotiations and a digital payment and settlement system, would be finalized and operational by the end of March, Akufo-Addo said.
(Updates with comments made during the launch ceremony from the third paragraph.)