In the news: African leaders take steps to form trade bloc

African leaders pledged to create a pan-African free-trade zone that removes barriers to trade and the movement of people across the continent. The initial steps to link Cairo to Cape Town were made in Egypt in early June and now leaders need to negotiate the details to remove tariffs and customs between countries. The leaders have set a 2017 deadline for the agreement to be implemented.

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Image source: BBC

This isn’t the first effort to create a more united Africa and it will take significant political will for the Tripartite Free Trade Area to become reality.

The Tripartite Free Trade Area will link three existing trading zones–Common Market for Eastern and Southern Africa (COMESA), East African Community (EAC), and Southern African Community (SADC).

As Harvard Professor Calestous Juma writes, the TFTA covers an area with a population of 632 million people and a combined GDP of $1.3 trillion. The TFTA area is nearly twice the size of China. Professor Juma assesses what a free-trade zone could mean for the continent here.

Currently, intra-Africa trade amounts to just 12% of the continent’s total trade, according to African Union statistics. That compares to 60% in Europe and 40% in North America.

How do you think a pan-African trade zone will affect your business? What leadership will it require? Comment below.

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