Signed in March 2018, Africa Continental Free Trade Area (AfCFTA) core objective was to create a single market across the continent an opportunity that will extend the provision of regional public goods, including soft and hard infrastructure while tapping into mining and energy while maintaining peace and security.
The AfCFTA Agreement promises to “deepen the economic integration of the African continent” and to work towards “an integrated, prosperous and peaceful Africa”.
22 Ratifications are needed for the AfCFTA Agreement to enter into force. On Thursday, the Ethiopian Parliament approved its membership to the Africa Continental Free Trade Agreement, raising the number of ratifications to 21.
Ethiopia boasts of a domestic market amounting to over 100 million people, making it the second biggest market in Africa after Nigeria. It is one of the fastest growing economies in the worlds whose economic growth is driven largely by industrial activity.
By approving its membership in the AfCFTA Agreement, Ethiopia joins the world’s largest free trade area that need just one more ratification to become fully functional.
Bringing together all 55 member states of the African Union the agreement will be covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than US$3.4 trillion.
Trade policy, trade facilitation, productive capacity, trade-related infrastructure, trade finance, trade information, and factor market integration, are among the involving issues the trade union seeks to agrees across Africa.
Estimations show that AfCFTA has the potential both to boost intra-African trade by 52.3 per cent by eliminating import duties and to double this trade if non-tariff barriers are also reduced. There will be harmonization, facilitation and coordination of trade liberalization across Africa in general.
The agreement is also expected to enhance competitiveness at the industry and enterprise level through the exploitation of opportunities for scale production, continental market access and better reallocation of resources.