Benin and Nigeria join growing African Union landmark trade pact

Trading will start in July 2020 to give member states time to adopt the pact framework.

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    The African Free Trade Agreement commits governments to greater economic integration, as the signatory states move toward removing trade barriers including tariffs on 90 percent of commodities [Nyancho NwaNri/Reuters]
    The African Free Trade Agreement commits governments to greater economic integration, as the signatory states move toward removing trade barriers including tariffs on 90 percent of commodities [Nyancho NwaNri/Reuters]

    A landmark free-trade agreement removing most tariffs and other commercial barriers in the African continent grew to encompass 54 signatories, after Benin and Nigeria signed up to the accord on Sunday.

    Albert Muchanga, the African Union's commissioner for trade and industry, announced Benin's intention to join at the bloc's summit officially launching the pact, in Niger's capital Niamey. Nigeria said earlier this week it would ratify the deal during the two-day summit that's also set to discuss migration and security -- issues affecting the host country Niger.

    "Nigeria is Africa's biggest economy and most populous country. Without Nigeria the free trade zone would've been handicapped," Niger's President Mahamadou Issoufou said in an interview from Niamey.

    The summit will see heads of state and trade delegations trying to iron out the details of the trade pact. Key issues include the removal of non-tariff barriers and regulations controlling trade liberalization, rules of origin and the development of a digital payment system.

    The African Free Trade Agreement commits governments to greater economic integration, as the signatory states move toward removing trade barriers including tariffs on 90% of commodities. The duty-free movement of goods is expected to boost intra-regional trade, while also helping countries move away from mainly exporting raw materials and build manufacturing capacity to attract foreign investment.

    Trading will start in July 2020 to give member states time to adopt the framework and prepare their business communities for the "emerging market," Muchanga said. "We haven't yet agreed on rules of origin and tariff confessions, but the framework we have is enough to start trading on July 1 2020," he said.

    Rules of origin and mechanisms for monitoring, reporting and the elimination of non-trade barriers should also be agreed upon during the summit.

    SOURCE: Bloomberg