New African Continental Free Trade Area set to boost exports within Africa
The African Continental Free Trade Area was launched on 1 January 2021. This will create one of the world’s biggest free-trade areas, and promises to make it easier to do business across the continent.
In addition to creating business opportunities and jobs, it has the potential to make a big difference to people trying to export goods from one African country to another.
At the moment, trade between African countries is relatively low. It’s often cheaper to export to another continent than it is to export to another African country. In the period 2015-17 only 2% of trade in Africa was with other African countries, compared to 47% in The Americas, 61% in Asia, 67% in Europe and 7% in Oceania (source: UN trade agency, Unctad)
The deal commits countries to remove tariffs on 90% of products within a five-year period. It was signed by 54 of the African Union’s 55 member states, and ratified by 34 so far.
Ben Bennet, professor of International Trade and Marketing Economics at the Natural Resources Institute at the University of Greenwich, shared some background on the topic of intra-Africa agricultural trade and its challenges during one of our AgriFood Africa Connect virtual missions. You can watch his talk below:
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