(AP) — Several African heads of state have gathered in Niger’s capital to launch a continentwide free trade area.

The African Continental Free Trade Area aims to create a single unified market for the continent’s 1.3 billion people and to boost economic development in an estimated market of $3.4 trillion.

Plans for the free trade zone received a boost last week when Africa’s largest economy, Nigeria, became the 25th country to ratify the trade agreement.

The general agreement has been signed by 54 of Africa’s 55 countries, with only Eritrea not signing up.

The location of the zone’s headquarters and a timeline for the start of trading are expected to be announced at the African Union summit in Niamey on Sunday. </s> Leaders from 44 African countries on Wednesday signed an agreement to form a $2.5 trillion continental free-trade zone, but Nigeria was absent.

The free-trade zone is the largest in the world since the creation of the World Trade Organisation in 1995.

Deliberations on the free-trade zone begun in 2015 and was originally projected to capture 55 countries.

At the African Union summit in Kigali, Rwanda, Paul Kagame, host president, declared the meeting a success after initial negotiations were concluded.

President Muhammadu Buhari had been initially scheduled to attend the summit and sign the agreement after the federal executive council gave its approval at its March 14 meeting.

The trip was cancelled on Sunday, March 18 and the presidency did not give a reason for the development. </s> Trade within Africa has enormous potential. Whether a new free trade zone on the continent will realize that potential is up to the more than 50 nations participating in it, writes DW’s Claus Stäcker.

A friend of mine from Zimbabwe recently bought a used car. After saving up enough money, he took advantage of a window of stable internet to browse and compare different models online. He checked mileage, trunk size and fuel efficiency, then he finally placed an order — but not in Zimbabwe, nor even in neighboring South Africa, which has an established auto industry and a large used car market. His dream car was in Japan, and the dealer in Yokohama quickly prepared the freight paperwork.

Soon to be the world’s largest free trade zone

A broker made sure the car landed in South Africa’s largest port, Durban, a few weeks later. To save on further shipping costs, my friend took a two-day bus to Durban. After picking up the car, he drove the 1,700 kilometers (1,000 miles) back home. He had to pay a few extra dollars to get the car’s paperwork processed, because it was all in Japanese. He also had to navigate his way through several road checkpoints. Ultimately, he made it home — satisfied that, despite a few hiccups and extra red tape, he had still saved $800 (€713). This is what doing business is like in the South African Development Community (SADC) trade zone.

The SADC is one of five subregions that will form the new African Free Trade Area, known by the cumbersome acronym AfCFTA. The African Union hailed the new trade zone as an historic achievement during an event in Niger on Sunday marking its launch. The bloc was given a boost after Nigeria, which boasts Africa’s largest economy, agreed to sign on.

The AfCFTA, which the African Union says will be the world’s largest free trade area, has now been created — at least on paper. Eritrea is the only country in Africa not participating.

Everyone wants to make rapid social and economic progress in Africa a reality, particularly as refugees leaving the continent continue to endure tragedy in the Sahara and on the Mediterranean Sea. But it remains to be seen whether the AfCFTA can help make that dream a reality.

After all, African trade dreams aren’t new: As early as 1980, the African Union’s predecessor, the Organization for African Unity, agreed on a plan for greater economic integration on the continent. The Lagos Plan of Action, as it was known, not only provided for free trade, but even a common currency. Under Agenda 2063, the African Union’s master plan to speed up development and economic growth, 14 major initiatives have been agreed in addition to free trade — including linking the continent’s 54 national capitals by express trains. But at the moment, many places in Africa lack adequate energy, transportation and telecommunications infrastructure. At the borders, trucks line up for days on end. It is easier to get from Africa to Europe by plane than between many countries on the continent. Meanwhile, governments in Africa mistrust each other so much that they don’t even recognize the African standard passport.

At just shy of 2.5%, Africa’s share of world trade has remained unchanged for the past 20 years. Its continental economic power is less than half the size of Japan’s. Economic growth has recently shrunk to 3% and is still primarily based on foreign trade in oil, gold, diamonds, precious metals and cocoa. Intra-African trade in goods accounts for just 12% of trade volume. This is where the greatest potential lies, because many products would be much more competitive within Africa than on the global trade market. According to the Economic Commission for Africa, however, transport costs on the continent are the highest in the world. Moving a freight container from Tokyo to the Ivorian capital of Abidjan costs roughly €1,300, while intra-African transport from Addis Ababa in Ethiopia to Abidjan costs €4,500 — more than three times as much.

The fact that a Zimbabwean would rather order a used car in Japan than buy a VW, Nissan or BMW built in Africa is proof of the current predicament. African leaders may have celebrated their agreement in Niger, but its the concrete political steps they take that will show whether the AfCFTA is truly historic. </s> The African Continental Free Trade Area launched in Niger Sunday at the opening of the African Union Summit.The agreement, signed by 54 of 55 African nations, will form the largest free trade area in the world. There is much hope that pan-African trade will grow but structural issues are a challenge </s> JOHANNESBURG - Several African heads of state gathered in Niger's capital Sunday to launch a continentwide free trade area that represents an estimated market of $3.4 trillion.

The African Continental Free Trade Area aims to create a single unified market for the continent's 1.3 billion people and to boost economic development.

Plans for the free trade zone received a boost last week when Africa's largest economy, Nigeria, became the 25th country to ratify the trade agreement.

The general agreement has been signed by 54 of Africa's 55 countries, with only Eritrea not signing up.

The location of the zone's headquarters and a timeline for the start of trading are expected to be announced at the African Union summit in Niger's capital.

The goal of the new free trade area is to significantly increase trade within Africa. Currently, African countries conduct only 16% of their trade with each other, compared to 65% among European countries, according to the African Union.

Africa already has several smaller regional trading areas, including the East African Community, the Southern African Development Community, the West African Economic Community and the Common Market for Eastern and Southern Africa.

Many hurdles remain to creating an effective continent-wide trading area, including a lack of transportation infrastructure and border restrictions.

Another item to be discussed at the African Union summit is security in Niger and the surrounding Sahel region, which has seen a rise in jihadist violence.

The G5-Sahel security group, made up of Chad, Burkina Faso, Mali, Mauritania and Niger, was expected to encourage AU leaders to press the United Nations for more support fighting extremist violence. </s> The African Continental Free Trade Area launched in Niger Sunday at the opening of the African Union Summit. The agreement, signed by 54 of 55 African nations, will form the largest free trade area in the world. But while there is much hope that pan-African trade will grow, structural weaknesses are expected to make it a slow process. Anne Nzouankeu reports from Niamey, Niger; narration by Moki Edwin Kindzeka. </s> African leaders launched a continental free-trade zone on Sunday that if successful would unite 130 crore people, create a $3.4 trillion economic bloc and usher in a new era of development.

After four years of talks, an agreement to form a 55-nation trade bloc was reached in March, paving the way for Sunday's African Union summit in Niger where Ghana was announced as the host of the trade zone's future headquarters and discussions were held on how exactly the bloc will operate.

It is hoped that the African Continental Free Trade Area (AfCFTA) - the largest since the creation of the World Trade Organization in 1994 - will help unlock Africa's long-stymied economic potential by boosting intra-regional trade, strengthening supply chains and spreading expertise.

"The eyes of the world are turned towards Africa," Egyptian President and African Union Chairman Abdel Fattah al-Sisi said at the summit's opening ceremony.

"The success of the AfCFTA will be the real test to achieve the economic growth that will turn our people’s dream of welfare and quality of life into a reality," he said.

Africa has much caught up to do: its intra-regional trade accounted for just 17 percent of exports in 2017 versus 59 percent in Asia and 69 percent in Europe, and Africa has missed out on the economic booms that other trade blocs have experienced in recent decades.

Economists say significant challenges remain, including poor road and rail links, large areas of unrest, excessive border bureaucracy and petty corruption that have held back growth and integration.

Members have committed to eliminating tariffs on most goods, which will increase trade in the region by 15-25 percent in the medium term, but this would more than double if these other issues were dealt with, according to International Monetary Fund (IMF) estimates.

The IMF in a May report described the free-trade zone as a potential "economic game-changer" of the kind that has boosted growth in Europe and North America, but it added a note of caution.

"Reducing tariffs alone is not sufficient," it said.

Africa already has an alphabet soup of competing and overlapping trade zones - ECOWAS in the west, EAC in the east, SADC in the south and COMESA in the east and south.

But only the EAC, driven mainly by Kenya, has made significant progress towards a common market in goods and services.

These regional economic communities (REC) will continue to trade among themselves as they do now. The role of AfCFTA is to liberalise trade among those member states that are not currently in the same REC, said Trudi Hartzenberg, director at Tralac, a South Africa-based trade law organisation.

The zone's potential clout received a boost on Tuesday when Nigeria, the largest economy in Africa, agreed to sign the agreement at the summit. Benin has also since agreed to join. Fifty-four of the continent's 55 states have now signed up, but only about half of these have ratified.

One obstacle in negotiations will be the countries' conflicting motives.

For undiversified but relatively developed economies like Nigeria, which relies heavily on oil exports, the benefits of membership will likely be smaller than others, said John Ashbourne, senior emerging markets economist at Capital Economics.

Nigerian officials have expressed concern that the country could be flooded with low-priced goods, confounding efforts to encourage moribund local manufacturing and expand farming.

In contrast, South Africa's manufacturers, which are among the most developed in Africa, could quickly expand outside their usual export markets and into West and North Africa, giving them an advantage over manufacturers from other countries, Ashbourne said.

The presidents of both countries attended the summit.

The vast difference in countries' economic heft is another complicating factor in negotiations. Nigeria, Egypt and South Africa account for over 50 percent of Africa's cumulative GDP, while its six sovereign island nations represent about 1 percent.

"It will be important to address those disparities to ensure that special and differential treatments for the least developed countries are adopted and successfully implemented," said Landry Signe, a fellow at the Brookings Institution's Africa Growth Initiative.

The summit also saw the launch of a digital payments system for the zone and instruments that will govern rules of origin and tariff concessions, as well as monitor and seek to eliminate non-tariff obstacles to trade, the African Union said. </s> related media assets (image or videos) available. Click to see the gallery.

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African leaders met on Sunday to launch a continental free-trade zone that if successful would unite 1.3 billion people, create a US$3.4 trillion economic bloc and usher in a new era of development.

NIAMEY: African leaders met on Sunday to launch a continental free-trade zone that if successful would unite 1.3 billion people, create a US$3.4 trillion economic bloc and usher in a new era of development.

After four years of talks, an agreement to form a 55-nation trade bloc was reached in March, paving the way for Sunday's African Union summit in Niger where attendees will unveil which nation will host the trade zone's headquarters, when trading will start and discuss how exactly it will work.

It is hoped that the African Continental Free Trade Area (AfCFTA) - the largest since the creation of the World Trade Organization in 1994 - will help unlock Africa's long-stymied economic potential by boosting intra-regional trade, strengthening supply chains and spreading expertise.

"The eyes of the world are turned to Africa," Egyptian President and African Union Chairman Abdel Fattah al-Sisi said at the summit's opening ceremony.

AfCFTA "will reinforce our negotiating position on the international stage. It will represent an important step."

Africa has much catching up to do: its intra-regional trade accounted for just 17per cent of exports in 2017 versus 59per cent in Asia and 69per cent in Europe, and Africa has missed out on the economic booms that other trade blocs have experienced in recent decades.

Economists say significant challenges remain, including poor road and rail links, large areas of unrest, excessive border bureaucracy and petty corruption that have held back growth and integration.

Members have committed to eliminate tariffs on most goods, which will increase trade in the region by 15-25per cent in the medium term, but this would double if these other issues were dealt with, according to International Monetary Fund (IMF) estimates.

The IMF in a May report described a free-trade zone as a potential "economic game changer" of the kind that has boosted growth in Europe and North America, but it added a note of caution.

"Reducing tariffs alone is not sufficient," it said.

Africa already has an alphabet soup of competing and overlapping trade zones - ECOWAS in the west, EAC in the east, SADC in the south and COMESA in the east and south.

But only the EAC, driven mainly by Kenya, has made significant progress toward a common market in goods and services.

These regional economic communities (REC) will continue to trade among themselves as they do now. The role of AfCFTA is to liberalize trade among those member states that are not currently in the same REC, said Trudi Hartzenberg, director at Tralac, a South Africa-based trade law organization.

The zone's potential clout received a boost on Tuesday when Nigeria, the largest economy in Africa, agreed to sign the agreement at the summit. Benin has also since agreed to join. Fifty-four of the continent's 55 states have signed up, but only 25 have ratified.

One obstacle in negotiations will be the countries' conflicting motives.

For undiversified but relatively developed economies like Nigeria, which relies heavily on oil exports, the benefits of membership will likely be smaller than others, said John Ashbourne, senior emerging markets economist at Capital Economics.

Nigerian officials have expressed concern that the country could be flooded with low-priced goods, confounding efforts to encourage moribund local manufacturing and expand farming.

In contrast, South Africa's manufacturers, which are among the most developed in Africa, could quickly expand outside their usual export markets and into West and North Africa, giving them an advantage over manufacturers from other countries, Ashbourne said.

The presidents of both countries are attending the summit.

The vast difference in countries' economic heft is another complicating factor in negotiations. Nigeria, Egypt and South Africa account for over 50per cent of Africa's cumulative GDP, while its six sovereign island nations represent about 1per cent.

"It will be important to address those disparities to ensure that special and differential treatments for the least developed countries are adopted and successfully implemented," said Landry Signe, a fellow at the Brookings Institution's Africa Growth Initiative.

Regulations governing rules of origin, removal of non-tariff barriers and the development of a payments and settlements system are expected to be unveiled at the summit. </s> President Cyril Ramaphosa is joining other African leaders for the inauguration of what is billed as the world’s largest free-trade zone, due to take place on Wednesday, when heads of state in the African Union (AU) sign the African Continental Free Trade Area (AfCFTA) agreement.

Presidents, prime ministers, high-level officials and private-sector stakeholders are all in Rwanda’s capital for the AU’s 10th extraordinary summit of the heads of state and government. The meeting includes a business summit of panel discussions to be held on Tuesday under the theme, "Leveraging the power of business to drive Africa’s integration".

The AfCFTA looks to facilitate the free movement of goods and services as a precursor to the establishment of the African Customs Union. It features a host of measures and institutional frameworks to foster intra-Africa trade through the elimination of tariffs, the harmonisation of customs protocols, and the development of regional supply chains.

"AfCFTA will make Africa one of the largest economies in the world and enhance its capacity to interact on equal terms with other international economic blocs," commented AU Commission chairperson Moussa Faki Mahamat.

The AU’s executive council met over the weekend to finalise the legal and institutional frameworks for the free-trade zone, including a dispute settlement mechanism and protocols pertaining to the liberalisation of 90% of goods in the customs union.

About 46 countries are expected to sign on, comprising 29 presidents and 17 vice-presidents as signatories. Ramaphosa is expected to be in Kigali, along with International Relations and Co-operation Minister Lindiwe Sisulu, the Department of Trade and Industry’s Rob Davies, and his deputy Gratitude Magwanishe.

After Wednesday’s signing, phase two of the negotiations will kick off towards the end of 2018 and will entail thrashing out the details of investment requirements, rules of services trading, competition, and intellectual property rights.

The AfCFTA will be the second flagship project signed this year after the Single Air Transport Market, and forms part of the body’s larger continental economic integration plan enshrined in the AU’s developmental Agenda 2063.

The free-trade zone will span all the AU’s 54 member states, comprising 1.2-billion people and a combined GDP of $3.4-trillion. Intra-Africa trade accounts for a mere 16% of the continent’s total trade, compared to more than 70% of intra-regional trade seen in Europe.

The UN’s Economic Commission for Africa reckons that eliminating import duties alone could see AfCFTA boosting intra-continental trade by 52.3%.

Implementation of AfCFTA will go hand in hand with the union’s action plan on Boosting Intra-Africa Trade (BIAT), which aims to double trade flows by 2022.
African leaders agree on a continent-wide free trade zone, which encompasses all African nations except for Eritrea and Somaliland. The various European territories located in Africa are also excluded. It will be the largest free trade zone since the creation of the World Trade Organization.