African leaders to re-initiate discussions on free trade zone

2023-02-28 20:10:29
African leaders to re-initiate discussions on free trade zone

Three years ago, amid a blaze of optimism, African leaders officially launched a new continent-wide free trade area after 17 years of haggling. But transforming the blockbuster pact into reality remains a tough ask.

The African Continental Free Trade Agreement (AfCFTA), billed as the biggest free trade accord in the world in terms of population, gathers 54 out of 55 African countries, with Eritrea the only holdout.

AfCFTA's plan is to boost intra-African trade by 60 percent by 2034 by eliminating almost all tariffs, creating an economic bloc of 1.3 billion people with a combined gross domestic product of $3.4 trillion.

African countries currently trade only about 15 percent of their goods and services with each other, compared to more than 65 percent with European countries.

If fully implemented, AfCFTA would lift 50 million Africans out of extreme poverty and raise incomes by nine percent by 2035, according to the World Bank.

But implementation has fallen well short of that goal, running into hurdles including disagreements over tariff reductions and border closures caused by the Covid pandemic.

Backdrop of crises

This year's African Union summit came at a "delicate moment" for Africa, according to the International Crisis Group (ICG) think tank.

Russia's war with Ukraine and Western sanctions that followed "have rattled African economies and left many in deep distress", ICG adds, with food prices shooting up.

While Europe's internal market is knitted together by energy pipelines, motorways, railways and flight routes, Africa is playing catch-up, with decrepit infrastructure and corruption handicapping the process.

Source: Africanews


Error! Error occured!