Africa-wide free-trade agreement receives major boost
The African Development Bank (AfDB) has provided a $4.8m grant to support the African Union’s efforts to roll out the continental free-trade area. The grant forms part of a series of interventions by the development bank to accelerate implementation of the free-trade agreement. The trade agreement is seen as a major force for integrating the 55-nation continent and transforming its economy. Intra-African trade remains low compared with other major regions such as the EU and Asia.
In 2018, SA joined various other countries on the continent in signing the African Continental Free Trade Area (AfCFTA) agreement that aims to create a single continental market for goods and services, with free movement of businesspeople and investments. With about 1.2-billion people on the continent, the agreement is set to create one of the largest free-trade markets in the world.
Albert Muchanga, the AU’s commissioner for trade & industry, said the AfDB grant would be used for the delivery of various protocols relating to the structure and mandate of the AfCFTA secretariat. The trade agreement is expected to expand intra-African trade by up to $35bn per year, ease movement of goods, services and people across the continent’s borders and boost agriculture and industrial exports by 7% and 5% respectively.
Speaking on behalf of the AfDB’s director of industrial & trade development department, Obed Andoh Mensah said the trade deal will help stabilise African countries, allow small- and medium-sized enterprises to flourish, promote industrialisation and lift millions out of poverty.
“If the AfCFTA is complemented by trade facilitation reforms, reduction in nontariff barriers, improved infrastructure and policy measures to encourage employment and private sector investments, it will stimulate poverty reduction and socioeconomic development across Africa,” he said.