South Africa has become the latest country to sign the Africa Continental Free Trade Area (AfCFTA) agreement as it battles with poor economic data, an emerging market selloff and trade wars galvanised by the United States.
South Africa’s President Cyril Ramaphosa signed the AfCFTA agreement during the 31st Ordinary Session of the Assembly of Heads of State and Government taking place in Nouakchott, Islamic Republic of Mauritania.
Talks to start the free trade pact began in 2015 and were finally realised in March. But among the initial holdouts were Africa’s largest economies, Nigeria and South Africa, due to legal and internal issues. Some felt that this would be a stumbling block for AfCFTA. This has changed with South Africa’s signature.
The pact aims at creating a trade bloc, which Bloomberg estimates will have a combined gross domestic product of more than $3 trillion.
According to Bloomberg, “Intra-Africa trade currently stands at about 16 percent of the continent’s total, compared with 19 percent in Latin America and 51 percent in Asia. The agreement could increase this by half, the United Nations Economic Commission for Africa estimates”.