Forty-four African countries have signed an agreement establishing a free trade area seen as vital to the continent’s economic development, the head of the African Union said yesterday.
The creation of a free trade area billed as the world’s largest in terms of participating countries comes after two years of negotiations, and is one of the AU’s flagship projects for greater African integration.
“The agreement establishing the African Continental Free Trade Area (CFTA) was signed by 44 countries,” said Moussa Faki Mahamat, chairman of the AU commission. However, the agreement will still have to be ratified at a national level, and is only due to come into force in 180 days.
Nigeria was notably absent from the signatories after President Muhammadu Buhari pulled out of this week’s launch in Rwanda saying he needed more time for consultations at home. One of Africa’s largest markets, Nigeria hesitated after objections from business leaders and unions, a sign that getting the deal may face several hurdles in the National Assembly.
“Some countries have reservations and have not finalised their national consultations. But we shall have another summit in Mauritania in July where we expect countries with reservations to also sign,” said Albert Muchanga, the AU Commissioner for Trade and Industry.
However other economic powerhouses South Africa, Kenya, Morocco, Egypt, Ethiopia and Algeria, known for strict protectionist policies restricting imports and exports did sign the deal.
If all 55 African Union members eventually sign up, it will create a bloc with a cumulative GDP of $2.5 trillion (2 trillion euros) and cover a market of 1.2 billion people.
Currently, African countries only do about 16 percent of their business with each other, the smallest amount of intra-regional trade compared to Latin America, Asia, North America and Europe.