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· The African Union said that the first commercial deal under an Africa-wide free trade zone will take place on January 1 as outstanding talks are set to move online
· Though the African Continental Free Trade Area (AfCATA) has become enforceable last year, transactions that were due to start on July 1 were delayed as the virus delayed negotiations on the protocol for trade in goods, including tariff concessions
· It will have a potential market of 1.2 billion people and a combined gross domestic product of $2.5 trillion
· Fifty-four of the 55 nations recognized by the African Union have signed to join the deal, Eritrea being the only exception
The African Union said that the first commercial deal under an Africa-wide free trade zone will take place on January 1 as outstanding talks are set to move online.
Though the African Continental Free Trade Area (AfCATA) has become enforceable last year, transactions that were due to start on July 1 were delayed as the virus delayed negotiations on the protocol for trade in goods, including tariff concessions.
Now, the remaining negotiations will be finalized through a new African Virtual Trade-Diplomacy Platform that is being developed as a public-private partnership between the African Union Commission and more than 20 African multinational companies.
Set to be fully operational by 2030, the trade deal could be the world’s biggest free trade zone by area. It will have a potential market of 1.2 billion people and a combined gross domestic product of $2.5 trillion. Fifty-four of the 55 nations recognized by the African Union have signed to join the deal, Eritrea being the only exception. The agreement was ratified by 28 countries and more to follow.
Africa lags other regions in terms of internal trade. The intra- Africa commerce accounts for just 15% of the total trade of the region, which is far below other regions. For instance, the intra trade in Asia is 58% and more than 70% in Europe. AfCATA aims to lower or eliminate cross-border tariffs on 90% of goods, facilitating the movement of capital and people, promoting investment and paving the way for a continent-wide customs union.
