44 African nations sign pact establishing free trade area
Badhon : Forty-four African countries have signed an agreement establishing a free trade area seen as vital to the continent’s economic development, the head of the African Union said Wednesday. The creation of a free trade area billed as the world’s largest in terms of participating countries comes after two years of negotiations, and is one of the AU’s flagship projects for greater African integration. (AFP)
A separate agreement saw 27 countries agree to the free movement of people across their borders, however more details were not immediately available on this accord. The deal will still have to be ratified at a national level, and is only due to come into force in 180 days.
Notably absent from the signatories was Africa’s biggest economy and most populous nation Nigeria, after President Muhammadu Buhari pulled out saying he needed more time for consultations at home. Nigeria hesitated after objections from business leaders and unions a sign that getting the deal through scores of national parliaments may face several hurdles.
However other economic powerhouses South Africa, Kenya, Morocco, Egypt, Ethiopia and Algeria known for strict protectionist policies restricting imports and exports, did sign the deal. If all 55 African Union members eventually sign up, it will create a bloc with a cumulative GDP of $2.5 trillion (2 trillion euros) and cover a market of 1.2 billion people.
Currently, African countries only do about 16 percent of their business with each other, the smallest amount of intra-regional trade compared to Latin America, Asia, North America and Europe. And with average tariffs of 6.1 per cent, businesses currently pay higher tariffs when they export within Africa than when they export outside it, according to the AU.