Africa’s trade ministers have agreed on final tweaks to the implementation of a Continental Free Trade Area (CFTA), setting the stage for creation of the world’s largest trading area.
Notably, this came at a time when other mega-regional trade agreements were stalling. The World Trade Organisation (WTO) recent talks ended without any progress as the United States of America (USA) withdrew from the Trans-Pacific Partnership. At the same time, negotiators from Canada, the USA and Mexico continue to hit walls with their North America Free Trade Area (NAFTA) negotiations.
During recent trade talks in Niamey, the capital of Niger, African governments made progress on critical negotiations, including reaching agreements on services, and setting a framework within which details of tariff reductions have to be worked out.
However, African leaders and technocrats are pleased with the progress. Niger’s and African Union champion, Mahamadou Issoufou, views it as “a massive historical opportunity” to open up and diversify African economies.
“When trade grows, markets open and economies begin to diversify. Intra-African trade is especially valuable, comprising a large share of value-added and industrial products like processed agricultural goods, basic produce, and financial and retail services,” Issoufou said.
“A strong CFTA would give Africa extra weight in talks with Europe and America,” says George Boateng of the African Centre for Economic Transformation.
“Covering a market of 1.2 billion people and a combined GDP of US$2.2 trillion, the CFTA is a staggering proposition. And with the continent’s economy expected to grow to US$29-trillion by 2050, the CFTA will represent the largest trading area,” says Vera Songwe, Executive Secretary of the United Nations Economic Commission for Africa (UNECA).
Supporters of the deal argue that it will create larger, more competitive markets, helping to ignite Africa’s stalled industrialisation. Some 82% of African countries’ exports, mostly made up of commodities, go to other continents. By contrast, over half of intra-African trade is in manufactured products.
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