African nations mull trade deal
Negotiations on the African Continental Free Trade Area (CFTA) resume at the African Union Summit on Saturday.
The CFTA aims to remove trade barriers between 54 African countries and enjoys widespread political support. The UN Economic Commission for Africa estimates it could generate up to $35 billion in additional trade per year. Yet significant economic differences across Africa are likely to complicate the deal, with observers questioning whether it can be completed by the ambitious October 2017 due date. Other barriers – like Africa’s poor infrastructure – could further hamstring the CFTA by increasing the cost of doing business.
Although the deal may disproportionately benefit wealthier African nations – 60% of intra-African trade is produced by just seven countries – it’s forecasted to benefit the region as a whole. But international exporters and primary industries may feel the heat from the CFTA: it is predicted to erase $10 billion in imports from outside the continent.
While the CFTA may not be completed within the 2017 timeframe, Saturday’s summit is likely to see African Union members reaffirm their commitment to the deal’s eventual implementation.