The Launch of the African Free Trade Area (AfCFTA)
The economic benefits of the African Continental Free-Trade Agreement (AfCFTA), which is set to come into effect in July, will be substantial if non-tariff trade barriers are dismantled and member states align themselves towards common goals and philosophies. Signed in Rwanda in early 2018, the AfCFTA initiative establishes a single Continental market that will allow for the free movement of business people, goods and investments. It covers 54 member states of the African Union – a market of 1.2-billion people with a combined gross domestic product (GDP) of about $2.5 trillion. The agreement initially requires member states to remove tariffs from 90% of goods. This will boost intra-African trade, which remains exceptionally low at less than 20% of total trade. That compares to 59% and 69% of intra-regional trade in Asia and Europe respectively, according to Brookings Institution. This Newsletter will follow the AfCFTA, and I am writing a monograph for the SA Institute of International Affairs (SAIIA) on the subject now.
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