AfCFTA becomes reality with new trading standard
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Agência Angola Press | 5 July 2021
AfCFTA becomes reality with new trading standard
The Secretary General of the African Continental Free Trade Area (AfCFTA), Wamkele Mene, said Monday in Luanda that the creation of the organisation he represents is a reality and soon Africa will have a new trade standard.
Wamkele Mene was speaking to the press at the end of an audience with the President of the Republic, João Lourenço, with whom he discussed issues related to the challenges and development of AfCFTA, whose main objective is to achieve continental economic integration.
"I was quite encouraged by the words of the Angolan President, who reiterated Angola’s commitment, and also pledged to give full support to the leadership of the organisation," he said.
He said that during the meeting, the Angolan Head of State also stressed the importance of reducing trade barriers in Africa, having highlighted the need for increased trade between African countries in the various types of local products that can help strengthen their economies.
He said that currently the AfCFTA has 39 countries that have signed and ratified the agreement that created the zone, and they have committed to removing trade barriers.
Background
The African Continental Free Trade Area came into force in January this year, becoming the largest free trade area in the world, in relation to the number of participating countries.
The agreement establishing the organisation was signed in March 2018 by 54 of the 55 African Union member countries and ratified at the time by 31. Negotiations began in 2015.
According to the World Bank, the economic bloc adds up to more than 1.3 billion people and a combined GDP of USD 3.4 trillion. The entity also estimates that, with the changes, more than 30 million people will leave extreme poverty in the region.
The percentage of trade carried out between African countries is currently low, estimated at between 16 percent and 18 percent. The remaining trade transactions are with countries of other continents, such as the export of goods.
A Free Trade Area is a regional economic bloc formed by several countries for the purpose of reducing or eliminating customs duties between member countries. The aim is to stimulate trade between the participating countries.
Thus, the African nations project to reduce tariffs on various goods and provide for "greater industrialisation and value addition" to the continent’s products.
In addition to tariffs, African trade faces strong non-tariff barriers, through laws, regulations and quotas. According to the African Union, this problem will be a focus from now on.
To this end, an online monitoring system for these barriers has been set up, through which traders can report difficulties in domestic trade, such as excessive taxation and requirements or restrictive product regulations.
