Somalilandsun: African countries began officially trading under a new continent-wide free trade area on January 1st this year, following the launch of the African Continental Free Trade Area (AfCFTA)
The body was initially meant to be launched on July 1, 2020, but was pushed back after COVID-19 made in-person negotiations impossible.
The AfCFTA aims to bring together 1.3 billion people in a $3.4 trillion economic bloc that will be the largest free trade area since the establishment of the World Trade Organization.
But obstacles – ranging from ubiquitous red tape and poor infrastructure to the entrenched protectionism of some of its members – must be overcome if the bloc is to reach its full potential.
Every African country except Eritrea has signed on to the AfCFTA framework agreement, and 34 have ratified it, while 41 of the zone’s 54 member states have submitted tariff reduction schedules by date of launch.
Members must phase out 90 percent of tariff lines – over five years for more advanced economies or 10 years for less developed nations. Another 7 percent considered sensitive will get more time, while 3 percent will be allowed to be placed on an exclusion list.
Meanwhile the coming into force of the Agreement establishing the African Continental Free Trade Area (AfCFTA) on 1 January 2021 is particularly significant given the impact of the COVID-19 pandemic on trade and the global economy.
The AfCFTA presents an opportunity for traders, both large multinationals and small and medium-sized enterprises (SMEs), to trade across Africa through a liberalised market for goods and services. It is worth noting that one of the general objectives of AfCFTA is to create a single market for goods and services, facilitated by movement of persons (Article 3(a) of the Agreement).
This consequently places free migration of persons at the heart of free trade. Read more HERE