The African Union has announced that the first commercial deal of the world’s biggest free-trade pact, the African Continental Free Trade Area (AFCFTA), will be taking off on January 1, 2021, as virtual meetings will be used to complete the outstanding discussions and negotiations.
The free trade agreement, which was signed last year and was supposed to take off on July 1, this year, had been delayed due to the coronavirus disease outbreak that has set back negotiations on the protocol for trade in goods, including tariff concessions.
Nairametrics had some months ago reported the delay in the take-off of AFCFTA, a $3.4 trillion economic block, due to the pandemic. Although the agreement was already legally in force, several details need to be ironed out as part of phase one of the process in order to make the July deadline a reality.
The continental body that is leading this trade deal, African Union, in a statement said that the outstanding negotiations will be finalized through a new African Virtual Trade Diplomacy Platform which is developed as a public-private partnership between the African Union Commission and over 20 African multinational companies.
The free trade area, which is the world’s biggest free-trade zone by area, is expected to be fully operational by 2030. It has 55 member countries that have signed on to join including Nigeria, out of which 28 of them have ratified that agreement.
Africa is behind other parts of the world in terms of internal trade, with intra-continental trade accounting for just 15% of the total when compared to what is obtainable in Asia which is 58% and over 70% in Europe.
The AFCFTA agreement is expected to substantially increase trade within the region by lowering or eliminating cross-border tariffs on 90% of goods, thereby facilitating the movement of capital and people, promoting investment and paving the way for a continent-wide customs union.