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The first goods will begin to flow under an Africa-wide free-trade pact on Friday, the culmination of more than five years of negotiations on cutting cross-border tariffs.
The accord comes to fruition at a time when trade tensions are rising across much of the rest of the world. The 55-nation Africa Union marked the occasion in a ceremony that came just hours after the U.K. left the European Union's single market and a new post-Brexit trade agreement entered into force.
It's “a day in which we take Africa a step closer to a vision of an integrated Africa, a vision of an integrated market on the African continent,” Wamkele Mene, the secretary general of the African Continental Free Trade Area, said during the event.
The treaty seeks to lower or eliminate cross-border tariffs on most goods, facilitate the movement of capital and people, promote investment and pave the way for a continent-wide customs union. The bloc has a potential market of 1.2 billion people with a combined gross domestic product of $2.5 trillion, and could be the world's biggest free-trade zone by area when the treaty becomes fully operational by 2030.
The accord will assist the continent to recover from the “devastating impact” of the coronavirus pandemic, said South African President Cyril Ramaphosa, who holds the AU's rotating chairmanship.
Intra-African trade fell to 14.5% of the total in 2019, from 15% the year before. The free-trade pact could bolster the proportion to 22%, and commerce within the continent could rise to more than $231 billion even if all other conditions remained unchanged, the African Export-Import Bank said in report published on Dec. 15. Internal shipments accounted for 52% of total trade in Asia and 72% in Europe, according to Afreximbank data.
Read more: As World Wavers on Free Trade, Africa Embraces It: QuickTake
All but one of the 55 nations recognized by the African Union have signed to join the area and more than half have ratified the accord. Eritrea, which has a largely closed economy, is the sole holdout.
The pact will help Africa to industrialize on a big scale, said President Nana Akufo-Addo of Ghana, the host country of the bloc's secretariat.
All outstanding issues relating to the bloc's various operation instruments, such as an online platform for tariff negotiations and a digital payment and settlement system, would be finalized and made operational by the end of March, Akufo-Addo said.
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