Photographer: Edition Sanogo / AFP / Getty Images
Photographer: Edition Sanogo / AFP / Getty Images
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The first goods will start flowing under a free trade agreement in Africa on Friday, culminating in more than five years of negotiations over the reduction of cross-border tariffs.
The agreement is being reached at a time when trade tensions are rising across much of the rest of the world. The African Union of 55 countries held the event in a ceremony that took place a few hours after the United Kingdom leaving the European Union’s internal market and a new post-Brexit trade agreement entered into force.
This is “a day in which we bring 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, said 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 continental-wide customs union. The bloc has a potential market of 1.2 billion people with a combined gross domestic product of $ 2.5 billion and could be the largest free trade zone in the world per area when the treaty enters into force by 2030 in full.
The agreement will help the continent recover from the “devastating impact” of the coronavirus pandemic, said Cyril Ramaphosa, South African president who holds the AU’s rotating presidency.
Trade within Africa fell to 14.5% of the total in 2019, compared to 15% the previous year. The free trade agreement could boost the share to 22%, and intra-continental trade could rise to more than $ 231 billion, even if all other conditions remain unchanged, the African Export-Import Bank said report published on 15 December. According to Afreximbank’s data, 52% of total trade was in Asia and 72% in Europe.
Read more: As global skepticism about free trade, Africa embraces it: QuickTake
All but one of the 55 countries recognized by the African Union have signed up to join the region and more than half have ratified the agreement. Eritrea, which has a largely closed economy, is the only hold.
The treaty will help Africa to industrialize on a large scale, said President Nana Akufo-Addo of Ghana, the host country of the bloc’s secretariat.
Akufo-Addo said that all outstanding issues regarding the various instruments of the bloc, such as an online platform for tariff negotiations and a digital payment and settlement system, would be finalized and implemented.
(Updates with comments made during the launch ceremony from third paragraph.)