South Africa’s and Togo’s parliaments ratified an agreement establishing the African Continental Free Trade Area (AfCFTA). The total number of countries committing to the deal has thus grown to 49.
Once the agreement comes into effect, it will create a tariff-free continent, covering a single market of 1.2 billion people in 55 nations with a combined GDP (gross domestic product) of about $3 trillion.
AfCFTA constitutes the largest free trade area globally.
The agreement is expected to reduce export tariffs which currently average 6.1%, and boost intra-African trade by more than 52% after import duties are eliminated.
It is focused on diversifying trade exports away from just extractions and enhancing the chances of small and medium enterprises to tap into more regional destinations.
The creation of the free trade area requires at least 22 countries submitting instruments of ratification. So far, the agreement has 15 ratifications, with seven more remaining.
The African Union’s (AU) Commissioner for Trade and Industry Albert Muchanga said this week he is confident the remaining votes required to enforce AfCFTA will be secured before the next AU summit.
BRICS countries are major investors in Africa, according to Russian Foreign Minister Sergey Lavrov, who said Moscow expects the bloc’s New Development Bank (NDB) to operate on the continent.
The BRICS countries (Brazil, Russia, India, China and South Africa) created the New Development Bank in July 2014. It funds infrastructure projects within the bloc. The bank’s capital is up to $100 billion.
RT. commit / ABC Flash Point Development News 2019.