Photographer: Sanogo / AFP / Getty Images
Photographer: Issue Sanogo / AFP / Getty Images
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The first goods will start flowing under an Africa-wide free trade pact on Friday, the culmination of more than five years of negotiations to reduce 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 Britain has left the European Union’s single market and a new post-Brexit the trade agreement has 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, secretary general of the African Free Trade Area, during the event. . .
The Treaty aims 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 at continental level. 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 largest free trade area in the world, by area, when the treaty becomes fully operational by in 2030.
The agreement will help the continent recover from the “devastating impact” of the coronavirus pandemic, said South African President Cyril Ramaphosa, who holds the rotating AU presidency.
Intra-African trade fell to 14.5% of the total in 2019, from 15% in the previous year. The free trade pact could increase the proportion to 22% and trade on the continent could increase to more than $ 231 billion, even if all other conditions remain unchanged, the African Export-Import Bank said in a statement. report published on 15 December. Domestic transport accounted for 52% of total trade in Asia and 72% in Europe, according to Afreximbank.
Read more: As World Wavers in the field of free trade, Africa embraces it: QuickTake
All but one of the 55 nations 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 President Nana Akufo-Addo of Ghana, the host country of the bloc’s secretariat.
All remaining issues related to the bloc’s various operational tools, such as an online platform for tariff negotiations and a digital payment and settlement system, will be completed and operational by the end of March, Akufo-Addo said.
(Updates with comments made during the launch ceremony from the third paragraph.)