African Continental Free Trade Area will take effect on May 30

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FTAs across Africa will be the largest free trade area in the world if measured by the number of participating countries. Source: Internet

According to the Vietnam Trade Office in Algeria,this announcement was made when Sierra Leone and Sahrawi Arab Democratic Republic (RASD) approved the agreement. As a result, there are 22 countries which have approved FTAs, allowing the minimum number of member countries to be reached, and the conditionto take effect of the African FTA.

The African Union (AU) and African Trade Ministers have just completed support tools to process the FTA implementation at the Extraordinary Summit of the Committee of Heads of State and Government to be held on July 7.

The support tools of the African FTA include rules of origin, tariff concessions schedules for trade goods, a mechanism for monitoring and eliminating non-tariff obstacles fortrade online, digital payment platform and building a portal to monitor African trade.

The AU announced it is waiting for the announcement of Zimbabwe and the Gambia after the two parliaments approve the agreement. African Trade Ministers will meet in Kampala, the capital of Ugandain the first week of June to check the progress of completing support tools to prepare for the extraordinary summit on FTAs ​​of the continent.

Moussa Faki Mahamat - Chairman of the African Commission added: This free trade agreement is a procedure that allows the creation of a large market to enhance trade and investment within the continent. The agreement was signed by 44 countries out of 55 African countries in March 2018.

The agreement is expected to create a non-tariff continent, develop local businesses, stimulate trade within Africa, promote industrialisation and create jobs.

According to the AU, this will pave the way for the establishment of the Customs Union in 2022 and the African Economic Community in 2028.

FTAs across Africa will be the largest free trade region in the world if calculated by the number of participating countries with total population of1.2 billion and GDP of2.5 trillion USD. Member countries commit to abolish taxes on more than 90% of future products.

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According to the United Nations Economic Commission on Africa, when it goes into operation, from now until 2020, the FTA will also contribute to increase by 52% in intra-regional trade. However, it lacks Nigeria, the largest economy in the continent, with the largest population in Africa (nearly 200 million people). The reason given by the government of Nigeria was that it must resolve disagreements with the private sector and unions.

The AU emphasised that reinforced intra-regional trade and market integration will ensure sustainable growth, create jobs, reduce poverty, attract foreign direct investment, promote industry and global economic integration.

The colonial policies prevented the neighbouring countries from trading with each other and African countries mainly dealt with Europe and the United States. The removal of trade barriers is expected not only increase intra-regional trade in Africa but also increase other necessary trade routes for the continent.