ZCZC
BCN-36
AFRICA-EU-ECONOMY-TRADE
African free trade zone takes effect: African Union
ADDIS ABABA, May 30, 2019 (BSS/AFP) – An African free-trade zone came into
force Thursday, a step toward creating what the African Union (AU) hopes will
be a continent-wide market of 1.2 billion people worth $2.5 trillion.
“This is a historic milestone!” tweeted Albert Muchanga, AU commissioner
for trade and industry.
“We celebrate the triumph of bold, pragmatic and continent-wide commitment
to economic integration.”
The African Continental Free Trade Area had been ratified by 22 countries
by April 29, the requisite number for formally notifying the AU. That paved
the way for it to take effect 30 days later as stipulated in its statutes.
The agreement’s operational phase is to be launched on July 7 at an AU
summit in Niger. There are still a number of outstanding issues to be
resolved, including arbitration measures, certifying the origins of goods,
tackling corruption and improving infrastructure.
Fifty-two of the AU’s 55 member states have signed the agreement to
establish the free trade area since March 2018, with the notable exception of
Nigeria, the largest economy on the continent.
But some of Africa’s other economic heavyweights — including Ethiopia,
Kenya, Egypt and South Africa — are among the 24 nations that have formally
ratified it. In the last month, Zimbabwe and Burkina Faso joined the fold.
The AU envisions the free trade zone, once fully implemented, driving
economic integration and spurring investment within the continent.
It hopes the progressive elimination of tariffs will help boost intra-
Africa trade by 60 percent within three years. At present, only 16 percent of
trade by African nations is with continental neighbours.
Advocates for the trade zone say it will help develop African economies
long driven by a focus on resource exploitation, and provide a platform for
negotiating with markets beyond the continent.
But critics say poor infrastructure and a lack of diversity between the
various economies could throw up barriers to this envisioned integration.
BSS/AFP/SR/1800 HRS