05 Apr

Africa Signs Free-Trade Deal to Replace Existing Agreements

African leaders signed accords setting up a continental free-trade area that’s expected to boost commerce within the 55-member African Union and eventually supplant a patchwork of existing agreements.

More than 40 nations signed the African Continental Free Trade Area agreement, or AfCFTA, which commits governments to removing tariffs on 90 percent of goods and phasing in the rest in future. The agreements will still require ratification by the individual governments and will only come into force when ratified by at least 22 countries.

“The promise of free trade and free movement is prosperity for all Africans, because we are prioritizing the production of value-added goods and services that are Made in Africa,” Rwandan President Paul Kagame said before the leaders began signing the agreements. “The advantages we gain by creating one African market will also benefit our trading partners around the world.”

Intra-Africa trade stands at about 16 percent of the continent’s total, compared with 19 percent in Latin America and 51 percent in Asia, according to the AU. The agreement could increase this by half for Africa, the United Nations Economic Commission for Africa estimates.

Read more at Bloomberg.com