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Economic 'game changer'? African leaders launch historic free-trade zone

The summit will see heads of state and trade delegations trying to iron out the details of the trade pact

Katarina Hoije | Bloomberg 

trade

A landmark free-trade agreement removing most tariffs and other commercial barriers in the African continent expanded to encompass 54 signatories, after Benin and Nigeria joined the accord on Sunday.

Albert Muchanga, the African Union’s commissioner for trade and industry, announced Benin’s intention to join at the bloc’s summit officially launching the pact, in Niger’s capital Niamey. Nigeria said it would ratify the deal during the two-day summit that’s also set to discuss migration and security -- issues affecting the host country Niger.

“Nigeria is Africa’s biggest 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.”

Ghana was selected to host the secretariat -- or permanent office -- for the trade zone, amid competition from Egypt, Ethiopia, Swaziland, Kenya, Senegal and Madagascar, the West African nation’s presidency said in an emailed statement. President Nana Addo Dankwa Akufo-Addo said Ghana is ready to give $10 million to help set up the pact’s office.

The summit will see heads of state and trade delegations trying to iron out the details of the trade pact. Key issues include the removal of non-tariff barriers and regulations controlling trade liberalization, rules of origin and the development of a digital payment system.

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

Trading will start in July 2020 to give member states time to adopt the framework and prepare their business communities for the “emerging market,” Muchanga said. “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,” he said.

Rules of origin and mechanisms for monitoring, reporting and the elimination of non-trade barriers should also be agreed upon during the summit.

First Published: Sun, July 07 2019. 23:15 IST
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