26 African countries unite for free trade
African leaders yesterday signed a potentially historic 26-country free-trade pact by creating a common market spanning half the continent from Cairo to Cape Town.
The deal on the Tripartite Free Trade Area (TFTA) caps five years of negotiations to set up a framework for preferential tariffs easing the movement of goods in an area home to 625 million people.
The TFTA pact was signed by leaders including the Egyptian president Abdel Fattah El Sisi, the Zimbabwean president Robert Mugabe, the Ethiopian prime minister Hailemariam Desalegn and the Tanzanian vice president Mohamed Bilal at a summit in the Red Sea resort town of Sharm El Sheikh.
But hurdles remain, with the timeline for bringing down trade barriers yet to be worked out and the deal needing ratification in national parliaments within two years.
“What we are doing today represents a very important step in the history of regional integration of Africa,” Mr El Sisi said as he opened the summit.
The deal will integrate three existing trade blocs – the East African Community, the Southern African Development Community and the Common Market for Eastern and Southern Africa – whose countries have a combined GDP of more than US$1 trillion.
The Kenyan academic Calestous Juma said the move was “extremely exciting” for the continent, as trade within Africa would increase to 30 per cent from 12 per cent once implemented.
“The comparison with Europe is 70 per cent of their trade is within Europe,” he said on the BBC’s Focus on Africa programme.
“By having larger markets, it signals the possibility of being able to manufacture products at a scale that is cost-effective. “For example, where you need large-scale investments such as $200 million to create a pharmaceutical factory, you couldn’t do that if you were only selling the products in one country.” He said the consolidation of financing would be another benefit of the TFTA.
Source: TheNational – 26 African countries unite for free trade
