African Ministers of Trade have approved a pact to give local traders access to the continental trade market.
The move is a big achievement for Africa’s regional integration efforts, according to officials who signed the agreement that is now awaiting approval by Africa Heads of State.
Known as the Africa Continental Free Trade Area, the pact is expected to be signed during Extra Ordinary Summit of AU on March 21, 2018.
The ministerial approval came six years after the decision to form the free trade area was adopted during the 18th ordinary session of the Assembly of Heads of State and Government of the African Union held in January 2012 in Ethiopia.
Some of the protocols and annexes in the agreement include Protocol on Trade in Goods, Protocol on Trade in Services and Protocol on Dispute Settlement.
The AFCFTA will bring together 55 African countries with a combined population of more than 1.2 billion people, with a vibrant and growing middle class, and a combined gross domestic product of more than Sh344.08 trillion.
The agreement, once signed by the Africa Heads of State, will improve the regulatory framework of trade in Africa. It will also lead to a reduction of tariff obstacles such as duties and surcharges and non tariff obstacles such as licensing rules and quotas.
Officials say the establishment of a single liberalized market will enhance competitiveness at the industry and enterprise level, enhance value addition of products and exploit economies of scale and optimum utilization of resource.
The establishment of the Continental Free Trade Area provides a comprehensive framework to pursue a developmental regional strategy alongside Boosting Intra-African Trade (BIAT) action plan which targets to double intra-African trade flows by January 2022.