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In addition, the stimulating effect of tariff reductions on domestic trade varies from region to region. This is because other factors often limit trade more than tariffs – for example, high trade costs due to quotas and licences, health and plant health measures, technical standards and bureaucratic procedures. Another problem is the lack of export diversification in many African countries. Countries with greater product diversification are more integrated into regional trade. As a result, the relative importance of regional trade to individual countries has grown rapidly after tariff reductions in some regions. B for example, SADC, but not in other countries such as the Economic and Monetary Community of Central Africa (CEMAC). The AfCFTA, signed by 54 African Union member states, is a trade agreement that provides for the creation of a single market by 2028 and the creation of an economic union and a free movement area. This agreement will create the world`s largest free trade area and contribute to the phasing in or elimination of tariffs and non-tariff barriers to trade and investment. This open market will certainly create many new business opportunities and strengthen trade relations between investors and economic players in the many countries concerned.

AfCFTA came into force on 30 May 2019 and its trade is scheduled to begin on 1 January 2021. Click here for the official AfCFTA text. In order to facilitate the implementation of the free trade area, the following institutions have been set up. As a result of the Phase II negotiations, additional committees may be set up through minutes. [38] Nigeria was one of the last nations to sign the agreement. With a population of 200 million, Nigeria is the most populous country in Africa and has about 98 million inhabitants in the most populous countries, Ethiopia and Egypt. With a nominal GDP of $376 billion, or about 17% of Africa`s GDP, it is just ahead of South Africa, which accounts for 16% of the African economy. Given that Nigeria is such an important country in terms of population and economy, its absence at the first signing of the agreement was particularly striking.

South African President Cyril Ramaphosa highlighted this in his comments of 12 July 2018, commenting: „The continent awaits Nigeria and South Africa. Through trade between us, we are able to maintain more resources on the continent. South Africa signed the agreement later. [52] Intra-African trade has great potential to establish regional value chains and stimulate growth and development. This is because in Africa, trade in manufactured goods is more numerous than African countries export to third countries. High value-added products such as vehicles and cosmetics account for about 40% of intra-African trade (raw materials 44 per cent, agricultural products about 16 per cent). On the other hand, exports outside Africa remain largely dominated by raw materials (about 75%). Given that the Nigerian government continued to consult with local business groups in the second half of 2018, one of the main concerns was whether the agreement adequately prevented anti-competitive practices such as dumping. [59] At the close of 2018, former President Olusegun Obasanjo said the delay was „regrettable“ and stressed the lack of trade in goods between African countries, the difficulties in getting from one African country to another, and the colonial legacy of these restrictions on Africa`s growth. [60] The government steering committee responsible for the consultation process is expected to release its report on the agreement in January 2019. [61] The IMF therefore considers it essential, for the future of the negotiations, to take seriously the concerns of the weaker nations.