Ghana has officially commissioned and handed over the African Continental Free Trade Agreement (AfCFTA) Secretariat headquarters to the African Union (AU) in Accra, Ghana. In attendance was Ghanaian President Nana Akufo-Addo, African Union Commission Chairman Moussa Faki Mahamat, and AfCFTA Secretary-General Wamkele Mene.
In July 2019, Ghana was selected ahead of six other countries as the country to host the AfCFTA secretariat based on regional balance formula.
The first commercial deal under the AfCFTA is expected to take place on January 1, 2021, as outstanding discussions will take place online. Disruptions arising from the COVID-19 pandemic forced a delay of the implementation of the agreement initially set for the beginning of July.
The outstanding negotiations will now be finalized through a new African Virtual Trade-Diplomacy Platform, which is being developed as a public-private partnership between the African Union Commission and more than 20 African multinational companies
Nevertheless, the AU maintains that the agreement will offer Africa an opportunity to reconfigure its supply chains, reduce reliance on others, and hasten the establishment of regional value chains which will boost intra-Africa trade.
According to the United Nations Economic Commission for Africa (UNECA), the AfCFTA is, by the number of participating countries, the largest trade agreement since the formation of the World Trade Organisation (WTO). Its implementation will form a $3.4 trillion economic bloc with 1.3 billion people across the continent.
Set to be fully operational by 2030, the trade area could be the world’s biggest free-trade zone by area, having a potential market of 1.2 billion people and a combined GDP (Gross Domestic Product) of $2.5 trillion. 54 of the 55 nations recognized by the African Union have signed to join the area, except Eritrea, while 28 have ratified the agreement.
Africa’s intra-continental trade accounts for just 15% of the total, compared with 58% in Asia, and slightly more than 70% in Europe. Therefore, the agreement seeks to change that by lowering or eliminating cross-border tariffs on 90% of goods, facilitate the movement of people and capital, promote investment, and pave the way for a continent-wide customs union.
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