Africa Launches the World’s Largest Free Trade Zone

After months of reluctance over competition concerns, Nigeria’s support gives weight to a 55-nation bloc worth $3.4 trillion. Intra-African trade makes up only 17% of exports, which are hampered by poor infrastructure, taxes, bureaucracy and corruption. The trade pact aims to boost cross-border trade by reducing or eliminating duties and red tape. To help lower costs, the AU launched a pan-African payment system at the summit in Niger’s capital. African exporters want the free trade area to quickly enter into force to eliminate barriers and create free movement between states. Despite the African free trade area’s launch, much work remains before the agreement becomes effective. While all of the African Union’s 55 members except Eritrea have signed on to the free trade area, only half have ratified the deal. And even after costs are reduced, Africa’s exporters still will have to contend with non-tariff barriers that will take much longer to fix — such as corruption and poor transport links between nations. SOURCE: VOA

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