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African countries agree to launch continental free trade area

African countries agree to launch continental free trade area

CAPE TOWN: Agreement has been reached to establish the African Continental Free Trade Area (AfCFTA) which is envisaged to offer opportunities to create large economies of scale, says the South African Department of Trade and Industry (dti).

Trade and Industry Minister Rob Davies and his deputy, Bulelani Magwanishe, attended the African Union (AU) Ministers of Trade (AMOT) meeting held in Kigali, Rwanda, last week. The AfCFTA, which also offers an opportunity to create a bigger market and to improve the prospects of the continent’s ability to attract investment, was among the key issues discussed by Ministers at the meeting.

South Africa is, therefore, committed to a co-ordinated strategy to boost intra-Africa trade and to build an integrated market in Africa that will see a market of over one billion people with a GDP (gross domestic product) of approximately 2.6 trillion US dollars,” the dti said.

“Beyond the Tripartite Free Trade Area, the AfCFTA will provide new export opportunities for South African products and services in West Africa and North Africa.”

The AfCFTA is being pursued under the development integration approach. This approach combines market integration with industrial and infrastructure development to address Africa’s productive capacity and supply side constraints.