Africa is making strides towards economic integration which if successful could fetch a lot for the continent in terms of business development. The launch of a free trade agreement by three African economic blocs in Egypt last week, Africatimes reports, will be an important step towards a potentially game-changing common market spanning the continent.
The deal between the East African Community, Southern African Development Community and the Common Market for Eastern and Southern Africa, analysts say, will create a market of 26 countries with a population of 625 million and gross domestic product of more than $1 trillion. It emerged from the Egypt’s meeting that the Tripartite Free Trade Area (TFTA) will be inaugurated at a summit of Heads of State and government later. “The launch of the TFTA is a significant milestone for the African continent.” We believe that this sends a powerful message that Africa is committed to its economic integration agenda and in creating a conducive environment for trade and investment,” South African government is quoted by Africatimes as saying.
The move was reportedly welcomed by business leaders at the World Economic Summit for Africa in Cape Town last week, with participants highlighting the fact that just 12 per cent of African countries’ total trade is with each other compared to some 55 per cent in Asia and 70 per cent in Europe. “The tripartite trade agreement is really important as a first step for Africa… which then can engage with the European Union and others on a global basis,” Michael Rake, BT Group chairman and a co-chair of the forum, told reporters.
Boosting trade has long been an ambition of the African Union (formerly the Organisation of African Unity). Member States of the free trade area will range from relatively developed economies such as South Africa and Egypt to countries including Angola, Ethiopia and Mozambique et al, which are seen as having huge potential growth.
The United Nations Conference on Trade and Development said in a 2013 report that one reason for weak intra-African trade is that the focus has been more on the elimination of trade barriers than the development of capacity. Despite the challenges, Africa’s overall economy is expected to expand by 4.5 per cent this year, according to a report by the Organisation for Economic Co-operation and Development, the African Development Bank and the UN Development Programme.
Source : Cameroon Tribune