Human Progress reports:
In recent months, African nations have been in the process of creating, signing and ratifying the African Continental Free Trade Area (AfCFTA). The agreement is one of the largest trade liberalisation efforts since the founding of the World Trade Organization in 1995.
Last Sunday, at the 31st African Union (AU) Summit in Nouakchott, Mauritania; the total number of AfCFTA’s signatories reached 49 out of 55 African Union (AU) member states. So is free trade becoming mainstream in African politics?
If all 55 AU nations ratified the proposed agreement, AfCFTA would create a trading area with 1.2 billion people and a cumulative GDP of $2.5 trillion. It aims to improve trade within the continent by immediately removing tariffs on 90 per cent of goods, with the remaining 10 per cent of tariffs on “sensitive goods” phasing out over time.
Being able to trade freely with one’s neighbours is vital for economic growth. In 2016, just 18 per cent of Africa’s total exports were traded within the African continent. In Europe and Asia, intra-regional trade accounted for 69 per cent and 59 per cent of total exports respectively.
Under the AfCFTA, the UN Economic Commission on Africa estimates, intra-African trade could increase 52.3 per cent by 2022. It could double again, after the final 10 per cent of tariffs are removed. If adopted, the AfCFTA has the potential to revolutionise African trade and add billions to the continent’s GDP.
Trade not Aid – the sustainable solution.