African leaders in order to create a common market that would span half the continent from Cairo to Capetown, had signed signed 26 nations free trade pact.
The Tripartite Free Trade Area TFTA, signed in Egypt, will help in easy movement of goods across the 26 nations.
- It could have great impact on the African economies, that is responsible for just 2% of global trade in spite of strong growth.
- President of Egypt Abdel Fattah al- Sisi , Zimbabwean President Robert Mugabe and Sudanese President
- Omar al-Bashir were among those who signed the pact at a summit.
- Jim Yong Kim, President of World Bank stated that by launching TFT the African nations were clear that it is open for business.
- The pact requires ratification in national parliaments by 2017 for its implementation.
TFTA pact will integrate three trade blocks namely
- East African community,
- Southern African Development Community,
- Common market for Eastern and Southern Africa COMESA.
- These countries have combined gross domestic product of more than one trillion dollars with the population of 600 million people.
Benefits of TFTA
- Products can be produced at cheaper cost with the help of larger markets.
- Consolidation of financing is another benefit.
- This pact will attract foreign direct investment FDI into the region.
- It would be largest economic block on the continent and be a launching pad for the establishment of Continent Free Trade Are CFTA
- As per Mugabe, ”borderless economy” would be created by this and it would rank 13th in the world in terms of GDP.
- Intra-regional trade enhancement by creating wider market for increased flow of investments and help in enhancing regional infrastructure development.
- At the upcoming 25th summit of African Union in South Africa, the pact would be unveiled.
- Widely welcomed by the worlds business leaders, 12% of Arica’s trade is between countries on the continent.
- Africa must focus on creating more space for the private sector to play an active part if it is to increase the intra-continental trade as according to UN conference on Trade and Development.