The first goods will begin to flow under an Africa-wide free-trade pact on Friday, the culmination of more than five years of negotiations on cutting cross-border tariffs. The accord comes to fruition at a time when trade tensions are rising across much of the rest of the world. The 55-nation Africa Union (AU) will mark the occasion in a ceremony that comes just hours after the UK leaves the European Union’s single market and a new post-Brexit trade agreement enters into force. Africa could be the world’s biggest free-trade zone by area when its treaty becomes fully operationally by 2030. The bloc has a potential market of 1.2 billion people and a combined gross domestic product of $2.5-trillion. Intra-African trade fell to 14.5% of the total in 2019, from 15% the year before. The free-trade pact could bolster the proportion to 22%, and commerce within the continent could rise to more than $231 billion even if all other conditions remained unchanged, the African Export-Import Bank said in report published on December 15. Internal shipments accounted for 52% of total trade in Asia and 72% in Europe, according to Afreximbank data. The accord seeks to lower or eliminate cross-border tariffs on most goods, facilitate the movement of capital and people, promote investment and pave the way for a continent-wide customs union.
SOURCE: BUSINESS DAY LIVE