High dependence on trade in primary goods, high product and market concentration of exports, and weak regional production networks are among the main challenges of African counties.
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It aims to create a single continental market which would unite the continent and. One of the most ambitious trade deals in history, the agreement was signed on 21 March 2018 and entered into force on.
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Nevertheless, Asia and Europe are still the main trade partners of the continent. In an effort to improve the situation of trade on the continent, the African Union introduced a free trade agreement called the African Continental Free Trade Area (AfCFTA) Agreement. John Campbell, former ambassador to Nigeria and current senior fellow at the Council on Foreign Relations, said that part is “going to take some years to implement, and then some years for the impact to be seen.”īut if it all works out, he said, this deal could transform the economies of Africa. Intra-African trade has increased in recent years to 15.4 per cent. The main blocs are the Economic Organisation of West African States (Ecowas), Common Market for Eastern and Southern.
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“One of the biggest obstacles to trade is the nontariff barriers,” said Mhango, “and by this I mean logistical challenges and infrastructure and just the bureaucracy of going through immigration posts and going through customs at various borders.”ĭetails on how to fix those logistical problems are still being hammered out. This is not to say there are no currently existing trading blocs in Africa. The African Continental Free Trade Area (AfCFTA) aims to bring together 1.3 billion people in a 3.4 trillion economic bloc that will be the largest free trade area since the establishment of the. īut Mhango says removing those tariffs is the easy part of improving African trade. AfCFTA is designed to achieve this by removing most tariffs, which could bump intraregional trade by up to 25%, according to Reuters.
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This deal is meant to “ease trade among African countries,” said Yvonne Mhango, an economist at Renaissance Capital in South Africa, pointing out that many of these countries trade more with China or the United States than they do with each other. The African Continental Free Trade Area, or AfCFTA, is set to create a new $3.4 trillion economic bloc covering over a billion people. This week, 54 of 55 African Union members launched the biggest trade area since the creation of the World Trade Organization. Our Programmes Infrastructure Development Agriculture, Industry & Private Sector Development Trade & Customs Services Gender & Social Affairs.