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African Trade Pact Starts Operations With 54 Signatorie...

Business Maverick

Business Maverick

African Trade Pact Starts Operations With 54 Signatories

A general view during the 32nd African Union Summit in Addis Ababa, Ethiopia, 10 February 2019. EPA-EFE/STRINGER
By Bloomberg
08 Jul 2019 0

A landmark free-trade agreement removing most tariffs and other commercial barriers in the African continent became operational on Sunday, as 54 member states agreed on the process to implement the accord.

A landmark free-trade agreement removing most tariffs and other commercial barriers in the African continent became operational on Sunday, as 54 member states agreed on the process to implement the accord.

The members meeting at an African Union summit in Niger’s capital Niamey agreed on mechanisms that will underpin the accord, including determining the rules of origin, a digital payment system, an online tool for listing products and tariffs and a monitoring system to deal with non-trade barriers.

The African Free Trade Agreement commits the governments to greater economic integration, as the signatory states begin a multiyear process to remove trade barriers including tariffs on 90% of commodities. The duty-free movement of goods is expected to boost regional trade, while also helping countries move away from mainly exporting raw materials and build manufacturing capacity to attract foreign investment.

The agreement now includes 54 signatories, after Benin and Nigeria joined the accord on Sunday during the summit. In total, 27 countries including Kenya, Ghana, Gambia and Gabon have ratified the pact that came into force in May 2019. Morocco said it would ratify within days.

“Nigeria is Africa’s biggest economy and most populous country,” Niger’s President Mahamadou Issoufou said in an interview from Niamey. “Without Nigeria, the free trade zone would’ve been handicapped.”

Presidency Nigeria

@NGRPresident

Pres. @MBuhari signs, on behalf of Nigeria, the Agreement Establishing the African Continental Free Trade Area (#AfCFTA), at the opening of the 12th Extraordinary Session of the Assembly of African Union Heads of State and Govt, in Niamey, Niger Republic, July 7, 2019 #AUSummit

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Ghana will be home for the secretariat, or permanent office, of the trade zone, Egyptian President Abdel Fattah al-Sisi — chairman of the African Union — said in his closing statement. His nation along with Ethiopia, Eswatini, Kenya, Senegal and Madagascar had bid to be the host nation.

Ghana President Nana Addo Dankwa Akufo-Addo said his country is ready to give $10 million to help set up the office.

Trading with the slashed tariffs will start in July 2020 to give member states time to adopt the framework and prepare their business communities for the “emerging market,” said Albert Muchanga, the African Union’s commissioner for trade and industry. “We haven’t yet agreed on rules of origin and tariff confessions, but the framework we have is enough to start trading on July 1, 2020.”

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