January 17, 2021
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Africa continental trade deal takes off as Abuja chamber lauds initiative

By on January 1, 2021 0 211 Views

The first goods will begin to flow under an Africa-wide free-trade pact on Friday, the culmination of more than five years of negotiations on cutting cross-border tariffs.

The accord comes to fruition at a time when trade tensions are rising across much of the rest of the world.

The 55-nation Africa Union will mark the occasion in a ceremony that comes just hours after the U.K. leaves the European Union’s single market and a new post-Brexit trade agreement enters into force.

Africa could be the world’s biggest free-trade zone by area when its treaty becomes fully operationally by 2030.

The bloc has a potential market of 1.2 billion people and a combined gross domestic product of $2.5 trillion.

The accord “will fundamentally change the economic fortunes of our continent,” South African President Cyril Ramaphosa, who holds the AU’s rotating chairmanship, said in a speech on Thursday.

“It is the start of a new era of trade between African countries, when the continent will produce the goods and services it needs, when its economies will grow, industrialize and diversify, when it will realize the great potential of its abundant natural resources.”

Intra-African trade fell to 14.5 percent of the total in 2019, from 15 percent the year before.

The free-trade pact could bolster the proportion to 22 percent, and commerce within the continent could rise to more than $231 billion even if all other conditions remained unchanged, the African Export-Import Bank said in report published on Dec. 15. Internal shipments accounted for 52 percent of total trade in Asia and 72 percent in Europe, according to Afreximbank data.

The accord seeks to lower or eliminate cross-border tariffs on most goods, facilitate the movement of capital and people, promote investment and pave the way for a continent-wide customs union.

All but one of the 55 nations 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 the sole holdout.

The formation of the trading bloc could cushion the region against continuing coronavirus-related uncertainties and escalating trade tensions, as well as lessen its exposure to adverse terms of trade and price cycles for commodities, Afreximbank said last month.

Meanwhile, the Abuja Chamber of Commerce and Industry said the take off of has AfCFTA on Friday marked a new dawn in Africa’s drive towards economic integration.

It said the take off marks the realisation of a dream conceived in 1963 during the establishment of Organisation of African Unity now African Union.

In a statement by its President Al-Mujtaba Abubakar, the trade group said; “Nigeria has been fervently preparing for this day especially through the mobilisation and strategic activities of the National Committee on readiness for the AfCFTA.

“The various sub-sectoral groups have worked for months collating, designing and launching various sectoral action plans to put Nigerian private sector on strong footing for this continental programme.

“We are glad to affirm that ACCI is a strong partner all through even as we are set to ensure that the various recommendations for accelerated readiness are acted upon,” Abubakar said.

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