New African Continental Free Trade Area agreement to increase trade, investment

Amid escalating tensions in trade between the United States and China, Africa is swiftly driving into a development momentum by putting together a free trade agreement that spans the continent.

The African Continental Free Trade Area agreement takes effect on May 30, the step which is considered vital in taking advantage of a booming young population, strengthening intra-African trade and rely less on the volatility of commodity prices that affect raw materials that make up so much of exports.

With the agreement, countries have committed to removing tariffs on 90 percent of goods. Full implementation will take years. African Union Commission chair Moussa Faki Mahamat says the continental market has a combined GDP of USD 2.5 trillion.

So far, 52 of the African Union’s 55 member states have signed the agreement. Noticeably absent is Nigeria, Africa’s largest economy and most populous country. Albert Muchanga, the commissioner of Trade and Industry for the African Union took to Twitter to confirm that the agreement is currently in force and a unified market would be launched on July 7.

Historic milestone! #AfCFTA Agreement has today come into force. We celebrate the triumph of bold, pragmatic & continent-wide commitment 2 economic integration. We launch market on 7 July, 2019 & begin the journey of transformation 2 secure inclusive prosperity. @_AfricanUnion pic.twitter.com/MKHBtaHlAh

— Amb. Albert Muchanga (@AmbMuchanga) May 29, 2019

52 countries have signed the African Continental Free Trade Area agreement. Nigeria has kept itself away from the agreement saying that it requires consultation with domestic economic stakeholders before making any decision.

“Agricultural productivity, local processing of raw materials, product diversification, training, the sustainable enhancement of human resources, the extension of the industrial fabric, a vast network of infrastructure and the exploitation of the energy potential of the continent remain our job creation opportunities for young people, women and general social well-being,” AU Commission Moussa Faki Mahamat said.

“The African Continental Free Trade Area (AfCFTA) seeks to provide the most relevant answers possible to all these issues,” the chairperson added. He further cited that the continental free trade agreement is a process that would create a large market that is critical to increasing trade and investments on the continent.

Also Read: AfCFTA’s effectiveness creates more economic, trade ties with China