AFRICA – The African Union has announced that the first commercial deal of the world’s biggest free-trade pact, the African Continental Free Trade Area (AfCFTA), will be taking off on January 1, 2021.
The African Union further revealed that virtual meetings will be used to complete the pending discussions and negotiations with all member states.
The free trade agreement, which was signed last year and was supposed to take off on July 1, this year, has been delayed due to the corona virus pandemic that has set back negotiations on the protocol for trade in goods, including tariff concessions.
The African Union Commission, the continental body that is leading this trade deal, in a statement said that the outstanding negotiations will be finalized through a new African Virtual Trade Diplomacy Platform.
African Union Commission revealed that the platform for the trade deal is being developed as a public-private partnership between the Commission and over 20 African multinational companies.
In mid-august this year, Ghana’s President, Nana Akufo Addo presided over the official hand over and commissioning of the African Continental Free Trade Area (AfCFTA) Secretariat Building in Ghana’s capital Accra.
The AfCFTA Secretariat headed by seasoned South African trade diplomate H.E Wamkele Mene will oversee the implementation of the AfCFTA Agreement and strategic collaboration.
A report by the World Bank said the successful implementation of AfCFTA would mitigate negative COVID-19 effects on economic growth by boosting regional trade and reducing trade costs.
The AU maintains that the AfCFTA will offer Africa an opportunity to reconfigure its supply chains, reduce reliance on others and speed up the establishment of regional value chains which will boost intra-Africa trade.
According to the United Nations Economic Commission for Africa, the AfCFTA is, by the number of participating countries, the largest trade agreement since the formation of the World Trade Organisation.
Its implementation will form a $3.4 trillion economic bloc with 1.3 billion people across the continent.
Africa is behind other parts of the world in terms of internal trade, with intra-continental trade accounting for just 15% of the total when compared to what is obtainable in Asia which is 58% and over 70% in Europe.
The AfCFTA agreement is expected to substantially increase trade within the region by lowering or eliminating cross-border tariffs on 90% of goods, thereby facilitating the movement of capital and people, promoting investment and paving the way for a continent-wide customs union.
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