Trading under the African Continental Free Trade Agreement (AfCFTA) begins today, unlocking opportunities for liberalized trade for the continent’s private and public sectors. The trading, scheduled to start in July 2019 delayed because of the coronavirus pandemic.
Today’s trade commencement opens a single continent market estimated at $3 trillion, opening intra-African exports worth over $84 billion. Beyond trade, the deal will have multiple benefits, such as unlocking over 2 million jobs in Eastern Africa and generating welfare gains of up to $1.8 billion in the region.
Intra-African trade under the AfCFTA is expected to grow by over 50%, integrating the African market beyond national economies through promoting the free movement of labour and investments.
AfCFTA Secretary-General Wamkele Mene notes that the continent is ready to start trading today on new rules and preferences that integrate the market.
“54 out of 55 countries have signed the agreement, 33 have ratified ratifying the agreement and over 40 countries have submitted their offers which signals that Africa is ready to start trading today on the basis on new rules and preferences that will ensure that the African markets is integrated,” he says.
The AfCFTA drastically relaxes rules of origin and non-tariff barriers, allowing traders of all sizes to explore the 1.3 billion people market across the continent. Henceforth, Africa can trade on over 81% of products on preferential terms, after 41 countries submitted their tariff offers. Further negotiations on terms and tariffs will close by July 2021.
The AfCFTA is expected to improve intra-African trade which currently stands at between 16% and 18%. Further, it is expected to champion value addition, reducing the continent’s exposure to volatility emanating from trading in raw materials, as well as cutting Africa’s overreliance in global supply chains proven unsustainable by the COVID-19 pandemic.
The AfCFTA is the World largest free trade area since the formation of the World Trade Organization.