The trading phase under the African Continental Free Trade Area (AfCFTA), signed by 54 of the 55 countries in Africa, is set to begin from January 1, 2021. The deal unites an estimated $3 trillion market, and could help to realise more than $84 billion in untapped intra-African exports, according to a new report by the African Export-Import Bank (Afrexim bank).
For Intra-African trade, 90 per cent of all goods will become tariff free from January 1 for all the countries that have deposited their instruments of AfCFTA ratification with the chairperson of the African Union Commission (AUC). A total of 36 countries have already completed this procedure.
“If the export potential is tapped under the deal, intra-continental trade could rise to more than $231 billion, or about 22 per cent of total African commerce, even if all other conditions remained the same,” Afreximbank said in its report.
With all the African countries, except Eritrea, participating, the AfCFTA would have the largest number of member countries in any trade deal since the formation of the World Trade Organization. By creating a single market, the deal will deepen the economic integration of the African continent, and move towards the establishment of a future continental customs union.
By giving a boost to intra-regional trade in manufacturing, AfCFTA is expected to increase employment opportunities, and help women get into the workforce. It can result in gradual altering of global supply chains, especially for products that require relatively lesser skills.
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