African leaders create world’s largest free trade zone
Filed in: trade, regional integration, economic communities, economic growth
Written by Wesley Cate on June 16, 2015
African leaders have decided to create a free-trade zone running from Cape Town to Cairo and covering 26 countries. With Africa’s relatively small economies, regional integration is crucial for the countries to compete at a global scale. The zone will promote intra-African trade by reducing trade barriers and easing the movement of goods across the continent, potentially unlocking additional growth in an already fast growing region.
Three existing trade blocs—the Southern African Development Community; the East African Community; and the Common Market for Eastern and South Africa – will be collapsed into the single new free trade zone. These consolidated zones will help to overcome membership overlap among member states (Rwanda alone is a part of three economic communities in Africa), and ease policy tensions between competing zones.
However, the Tripartite Free Trade Area (TFTA) will face an uphill battle as individual countries work to endorse the agreement and adjust their policies accordingly. Still, the access to larger markets within the African continent represents a significant growth opportunity for the region.
Read more from the BBC here.