Leaders of nearly 50 African nations have signed a deal to create the African Continental Free Trade Area (AfCFTA), marking a historic milestone in the economic integration of the continent.
Yesterday (21 March), heads of state, prime ministers and ministers from countries including Ethiopia, Madagascar, Swaziland, and Angola were among those who inked the agreement which will create a single market of 1.2bn people with a combined gross domestic product of more than US$2 trillion.
The agreement commits countries to removing tariffs on 90% of goods, with 10% of “sensitive items” to be phased in later. It will also liberalise services and aims to tackle so-called “non-tariff barriers” which hamper trade between African countries, such as long delays at the border.
Some 27 countries also signed the separate African Union Protocol on Free Movement of People, which complements the AfCFTA by providing for visa-free travel, the right of residency and the right of business or professional establishment, for citizens between signatory countries.
According to the United Nations Conference on Trade and Development (UNCTAD), cutting intra-African tariffs could bring $3.6bn in welfare gains to the continent through a boost in production and cheaper goods.
Speaking during the official signing ceremony in Kigali, Rwanda, President Paul Kagame of Rwanda, who is chairperson of the Africa Union, thanked the AU Commission for its work in preparing the treaty and said that work on the AfCFTA had culminated in the AU’s “most consequential” undertaking.
Vera Songwe, executive secretary of the Economic Commission for Africa (ECA), meanwhile, said the move shows the resolve of African leaders to bring the continent’s diversity together and make the flagship project of the African Union Agenda 2063 a reality.
Moussa Faki Mahamat, chairperson of the African Union Commission, added “Africa is a sleeping giant that can’t wake up if the continent is divided”, and urged leaders to accelerate the pace of integration.
“The time is no longer for hesitation. I, therefore, call upon all the member states to sign and ratify the free trade area agreement. Our ambition must be to ensure its entry into force before the end of this year,” he said.
Songwe seconded this, also urging member states to promptly ratify the AfCFTA, recalling that the agreement will only enter into force once a sufficient number of countries have ratified the agreement.
The signing of the AfCFTA is a milestone in a process that began with the creation of eight sub-regional economic communities, the building blocks of the African Economic Community established in the 1991 Abuja Treaty, which provided the overarching framework for continental economic integration.
Click here for a full list of signatories.