Business & Economy

Africa’s TFTA to boost intra-regional trade

The Comesa-EAC-Sadc tripartite free trade area (TFTA) has officially been launched, setting the stage for the establishment of a single market for the 26 African countries in the Eastern and Southern African region.
It is hoped that the TFTA will boost intra-regional trade, which is estimated to be between 10 and 12 percent of total African trade, by creating a wider market, increasing investment flows, enhancing competitiveness and encouraging regional infrastructure development.
At a press conference on the sidelines of Afreximbank’s recent AGM in Zambia, former Nigerian president Olusegun Obasanjo said, ‘Any agreement in Africa that brings countries together for trade, for monetary alliance or union, is very good for us as a means of encouraging intra-African trade.’
He also called for an ‘earnest’ move towards a common currency on the regional economic level to further aid the matter. ‘I always say that a situation where we don’t have a common currency is an unhealthy situation,’ he added.
The signing of the TFTA in Egypt comes seven years after the heads of state and government of the three regional economic communities came together at the First Tripartite Summit of October 2008 in Kampala.
At the Egypt meeting, the leaders called for the finalisation of the outstanding issues related to the agreement. These include the elimination of import duties, trade remedies and rules of origin.
Following the signing, member countries will now proceed to initiate the ratification process through their legislative assemblies. The agreement will come into force once three quarters of the member states have ratified it.
The leaders also directed the commencement of phase II negotiations covering trade in services, co-operation in trade and development, competition policy, intellectual property rights and cross-border investments.
Analysts are optimistic that the agreement will go a long way towards dismantling the continent’s troubles, such as a lack of infrastructure, and is likely to see the same success as Comesa, which sees increased trade within the bloc every year. African Trade Insurance Agency (ATI) CEO George Otieno says that it is ‘good news’ that the TFTA had come to fruition. ‘You need some incentive to be able to trade in the region, which this will provide.’

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