The agreement creates a $3.4 trillion economic bloc
Fifty-five African countries have signed a free-trade agreement that will unite 1.3 billion people and create a $3.4 trillion economic bloc that will develop countries across the continent.
The agreement, African Continental Free Trade Area (AfCFTA), is the largest trade bloc since the World Trade Organization was founded in 1994. Africa’s current population is 1.2 billion, but it is expected to reach 2.5 billion by 2050
The operational phase of the African Continental Free Trade Area was launched July 7, in Niamey, Niger.
The operational instruments include rules of origin, an online negotiating forum, the monitoring and elimination of non-tariff barriers, a digital payments system and African Trade Observatory.
The AfCFTA was adopted March 21, 2018.
The African Union, which is headquartered in Addis Ababa, Ethiopia, announced that the free trade zone is expected to become operational in July 2020, DW News, which is based in Berlin, reported.
“The eyes of the world are turned to Africa,” Egyptian President and AU chairman Abdel -Fattah el-Sissi said.
The trade bloc is expected to boost the Africa’s economy by strengthening regional trade and supply chains, DW News reported. Currently intra-African trade only makes up about 16 percent of Africa’s total trade, much lower than Europe (69 percent) or Asia (59 percent), ChinaDaily.com reports.
But there are challenges that include poor roads, indequate railway lines, violence in specific areas, strict border controls and corruption, DW reported.