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Free Trade Agreement African Countries

However, 11 countries, including the Nigerian and South African economic giants, have not signed the framework protocol in Kigali, although the two countries have announced that they will join the train after further consultations with national stakeholders. “This is essential, because services account for about 60% of Africa`s GDP and, for example, in 2014, services accounted for 30% of world trade…. Markets for national services will be open to service providers from other African countries,” Muchanga said. Paul Brenton is a leading economist in the World Bank`s Trade and Regional Integration Unit (ETIRI). It focuses on analytical and operational work in the area of trade and regional integration. Given that the global economy is booming due to the COVID 19 pandemic, the creation of AfCFTA`s huge regional market is a great opportunity to help African countries diversify their exports, accelerate growth and attract foreign direct investment. What complicates matters further is that Africa was already divided into eight separate free trade zones and/or union unions, with different regulations. [Note 1] These regional bodies will continue to exist; The African Continental Free Trade Agreement aims firstly to remove barriers to trade between the various pillars of the African Economic Community and, finally, to use these regional organizations as building blocks of the ultimate goal of an African-wide customs union. [21] [30] [31] [32] So far, it is true that only five East African countries have submitted their ratification of the AfCFTA.

However, what matters is not the number of countries, but the fact that a regional bloc of contiguous countries, representing about three-quarters of regional GDP, is growing. From 1 January 2021, Djibouti, Ethiopia, Kenya, Rwanda and Uganda will all begin with a reduction in their tariffs – starting with a linear reduction to 90% of tariffs – which will result in the abolition of tariffs on intra-regional imports over a five-year period (10 years for countries considered by the United Nations as the “least developed countries”); By the standards of regional trade agreements, this pace of liberalization will be quite rapid. Guillermo Arenas is an economist in the Department of Trade and Regional Integration (ETIRI) at the World Bank. His area of expertise covers various aspects of the international economy and public order, including trade policy, export competitiveness and impact analysis. The implementation of afCFTA, although delayed by the COVID 19 pandemic, is expected to resume in January 2021, with the initial focus on facilitating trade for small and medium-sized enterprises, which account for 90% of the jobs created on the continent. But the world that AfCFTA will address in January will be very different from the world in which it was conceived.

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