African Continental Free Trade Worth $3.4 trillion to Launch on January 1, 2021

• The African Union has disclosed that the African Continental Free Trade Area (AFCFTA), the world’s largest free trade pact, will launch on January 1, 2021.
• Some months ago, Business Elites Africa reported the postponed of the AFCFTA, an economic alliance worth $3.4 trillion, due to the coronavirus pandemic.
• African Union, the continental body that leads this trade deal, said in a statement that the pending agreements will be concluded via virtual discussions and negotiations.

The African Union has disclosed that the African Continental Free Trade Area (AFCFTA), the world’s largest free trade pact, will launch on January 1, 2021, as virtual meetings will be used to have the concluding discussions and negotiations.

The free trade agreement, which was concluded last year and was expected to take off on July 1, this year, was postponed due to the coronavirus outbreak which has delayed the talks on the guidelines for trade in goods, including tariff concessions.

Some months ago, Business Elites Africa reported the postponed of the AFCFTA, an economic alliance worth $3.4 trillion, due to the coronavirus pandemic. Although the pact was already legally in force, in order to make the July deadline a reality, several details still needed to be ironed out as part of phase one of the process.

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African Union, the continental body that leads this trade deal, said in a statement that the pending agreements will be concluded via a new African Virtual Trade Diplomacy Platform that is being established as a public-private collaboration between the African Union Commission and over 20 African multinationals.

The free trade area is expected to be fully operational by 2030, making it the world’s largest free-trade zone by area. It has 55 member countries signed on to join, including Nigeria, 28 of which have ratified the agreement.

In terms of internal trade, Africa is behind other parts of the world, with intra-continental trade accounting for just 15 per cent of the total compared to what is being done in Asia, which is 58 per cent, and in Europe, more than 70 per cent.

It is projected that the AFCFTA agreement would significantly increase trade within the region by reducing or eliminating cross-border tariffs on 90% of goods, thus facilitating the flow of capital and people, encouraging investment and paving the way for a continent-wide customs union.