By Tata Mbunwe
The African Continental Free Trade Area, AfCFTA, was launched this Jan. 1 and will become the largest free trade bloc in the world since the creation of the World Trade Organisation.
The trade agreement signed by 54 African countries works towards a single customs union for Africa; eliminate 90% of custom duties on intra-African goods; facilitate movement of people and investment goods within Africa; and reduce non-tariff barriers, like the time it takes for goods to pass through customs.
AfCFTA could increase intra-African trade by over 50%, with the World Bank stating it could step up worldwide income to $76 billion.
Beginning Jan. 1, African countries officially began operating under this agreement which aims to bring together 1.3 billion people in a $3.4 trillion economic bloc that will be the largest free trade area since the establishment of the World Trade Organization, Al Jazeera reported.
Several African Heads of State have hailed the AfCFTA agreement, with Ghanaian President Nana Akufo-Addo stating it will help in emerging a new Africa and make the continent self-reliant.
“We are just a few hours away from the birth of the African Continental Free Trade Area, which will fundamentally change the economic fortunes of our continent. It is the start of a new era of trade between African countries…when [the continent] will realize its great potential of its abundant natural and human resources,” South African President Cyril Ramaphosa said in his New Year message.
The African trade bloc though may face predicted difficulties including poor infrastructure, and the potential for some members to adopt protectionist policies.
AfCFTA was supposed to be launched on July 2020 but the COVID-19 pandemic made negotiations impossible.
The continental free trade area will create a common market for goods and services in Africa and will lift several millions of Africans out if poverty, according to the World Bank.