Last week's creation of the African Continental Free Trade Area (CFTA) brings into being one of the world's largest free trade blocs, which promises to open the continent's economies to unprecedented trade and investment.
Trade between African nations remains comparatively low, accounting for only around ten per cent of commerce on the continent. CFTA, agreed at the AU's recent summit in Kigali, is designed to change that, by allowing the free flow of goods and services between its members. The UN Economic Commission for Africa (UNECA) has estimated its impact could increase intra-African trade by as much as 52 per cent by 2022, compared with trade levels in 2010.
The CFTA represents the cornerstone of the AU's 2063 Agenda which aims to politically and economically unify the continent. It is hoped to come into force within the next six months and will remove barriers to trade, correcting one of the strange quirks of African trade policy whereby exporters face higher tariffs when exporting within Africa compared with exporting outside the continent.
The creation of CFTA could prove a game-changer, transforming the wellbeing of people, communities and nations across the region. For this to happen, it is essential that the agreement be ratified by all African nations. By boosting trade, growth and employment, it could provide a decisive pathway from poverty for the continent's 1.2 billion people.
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