The African Continental Free Trade Area (AfCFTA) has agreed to allow the trading of 850 new products pending approval by the heads of state of the African Union.
Trading of the products will commence under AfCFTA’s Rule of Origin protocol.
Before the identification of the 850 new products, AfCFTA had already agreed on 3,800, accounting for 88% of the number of targeted products to be traded among member countries on the continent.
South Africa’s trade minister and chair of the Council of Ministers responsible for trade among African Union member states, Ebrahim Patel described this as a breakthrough.
Patel said the eighth meeting of ministers had concluded with a package that has 88% more products on the tariff books across the continent for which they have agreed on the rules of origin.
Secretary-general of the Secretariat of the African Continental Free Trade Area, Wamkele Mene said a new payment system, the Pan African Payments and Settlements Platform, has been launched to help member states trade using a single currency. This, he said, will deal with the challenges of using a third currency to trade.
AfCFTA is a free trade area founded in 2018, with trade commencing as of Jan. 1, 2021. It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations.
The free-trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization (WTO).
Ghana’s capital Accra serves as the secretariat of AfCFTA and the headquarters was commissioned and handed over to the African Union by Ghana’s President Nana Akufo-Addo on Aug. 17, 2020 in Accra.
The agreement was brokered by the African Union and was signed by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018.
It initially required members to remove tariffs from 90% of goods, allowing free access to commodities, goods and services across the continent.
The United Nations Economic Commission for Africa (UNECA) had estimated that the agreement would boost intra-African trade by 52% by 2022. The proposal was set to come into force 30 days after ratification by 22 of the signatory states.
On April 2, 2019, Gambia became the 22nd state to ratify the agreement, and on April 29 the Sahrawi Arab Democratic Republic made the 22nd deposit of instruments of ratification. The agreement went into force on May 30 and entered its operational phase following a summit on July 7, 2019.