Africa is set to become the largest free trade continent as the African Continental Free Trade Agreement (AfCFTA) came into force on Thursday, with the ratification of 24 out of 54 countries.
While US-China trade tensions continue to escalate, Africa is quietly putting together the agreement after clearing a key procedural hurdle.
With an expected market of $3 trillion, encompassing a population of 1.2 billion people, Africa would become the largest free trade area in terms of geographical area and number of countries involved through implementing the deal.
The agreement is aimed at creating a single continental market for goods and services with free movement of goods, people and investments, on the lines of the European Union, report VOA and CNN.
The commissioner of Trade and Industry for the African Union, Albert Muchanga, confirmed in a tweet that the agreement is now in force from May 30.
The African Union Commission twitted: “It is now official, the African Continental Free Trade Area Agreement has entered into force today.”
The operational phase of the Africa Free Trade Agreement will be launched at the African Union summit in Niger on 7 July.
So far, 52 countries have signed the agreement.
South Africa was among the continental heavyweights that have ratified it.
Nigeria, Africa's largest economy, has so far refused saying it needs to consult with domestic economic stakeholders before making a decision.
It’s hoped Nigeria will join to boost intra-African trade in a market of 1.2 billion people worth $2,5 trillion.
Nigerian President Muhammadu Buhari is now reviewing an impact assessment report that will determine whether or not Africa's most populous nation will join its counterparts in signing the agreement.
When fully implemented, the trade deal will create a single market for goods and services by removing existing trade barriers across Africa.
The agreement is expected to boost regional trade by reducing tariffs and allowing companies to expand and enter new markets.
Analysts remain worried, however, about a lengthy implementation process.
Africa has a multitude of regional and national actors with sharply divergent interests on trade. Many legal details are still being finalised, and experts warn that enforcing the agreement will be a challenge.
The African Union estimates that the agreement has the potential to boost intra-Africa trade by 53 per cent. Currently it stands at a mere16 per cent.
The decision to form a continental free trade area in Africa was adopted in January 2012 during the 18th Ordinary Session of the Assembly of Heads of State and Government of the AU while AfCFTA negotiations were officially launched by the AU in 2015.