Africa as a continent has officially entered into force the single largest free trade market agreement in the world since the formation of the World Trade Organization.
The African Continental Free Trade Area (AfCFTA) Agreement became a binding international legal instrument on May 30, 2019, and the market would be launched on July 7, 2019, said the African Union in a statement.
“Historic milestone! #AfCFTA Agreement has today come into force. We celebrate the triumph of bold, pragmatic & continent-wide commitment 2 economic integration. We launch market on 7 July, 2019 & begin the journey of transformation 2 secure inclusive prosperity,” said the African Union Commissioner for Trade and Industry, Amb. Albert Muchanga.
52 out of the continent’s 55 countries have signed the free trade agreement with the exception of Benin, Eritrea, and Nigeria due to concerns raised by local businesses. Nigeria’s failure to sign the agreement was due to concerns raised by its manufacturing association which says the AfCFTA would have a negative impact on its members.
It’s been over a year since 44 countries first signed the consolidated text of the Agreement in the Rwandan capital Kigali to enable the long-awaited economic integration and movement of goods and persons across member states.
The AfCFTA will create a single continental market for goods and services; enhance free movement of business persons and investments; enhance competitiveness at the industry and enterprise level through exploiting opportunities for full-scale production.
It will also enforce the establishment of the Continental Customs Union and the African customs union, expedite the regional and continental integration processes and exploit opportunities for scale production, continental market access and better reallocation of resources.
With the commitment of all countries, the AfCFTA could bring together the 1.2 billion African population with a combined gross domestic product (GDP) of more than $2.5 trillion to remove tariffs on 90 per cent of goods, with 10 per cent of “sensitive items” to be phased in later.
This agreement was first introduced in January 2012 during the 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in Addis Ababa, Ethiopia. The member states adopted the decision to establish the Continental Free Trade Area by 2017.