Nigeria—Africa’s largest economy and most populous country—has formally signed the African Continental Free Trade Area (AfCFTA) agreement.
Nigeria’s President Muhammadu Buhari has finally signed the Agreement Establishing the African Continental Free Trade Area (AfCFTA).
The President signed the agreement at the opening of the 12th Extraordinary Session of the Assembly of African Union Heads of State and Government taking place in Niamey, Niger Republic.
By signing the AfCFTA, Nigeria joins 54 countries in ratifying what is considered the largest continental free trade agreement in the world.
How local manufacturers stand to gain from the AfCFTA
The AfCFTA will enhance better cohesion between African Countries in terms of trade on the continent. Removing trade barriers such as high tariffs will greatly increase the volume of trade within the continent.
Having access to a larger market of around 1.2 billion people will potentially trigger industrialization and manufacturing for the local economy. This will in turn create vast employment opportunities on a continent home to the world’s fastest-growing labor force.
The United Nations Economic Commission for Africa (UNECA) projects that if all signatory countries follow through with policies that spur local productivity, the free trade argument could boost intra-African trade by 52% by 2022.
“While Nigeria is one of the last countries to sign on, it could yet be the biggest beneficiary of AfCFTA”, says Landry Signé, a Brookings Institution fellow.
“The unique continental market access combined with the increasing focus on industrialization as a catalyst for growth and priority of the government to shift away from over-reliance on volatile primary commodity exports will contribute to boosting Nigeria’s manufacturing sector and exports,” Signé says.
All signatories will be encouraged to increase the “global competitiveness” of their products as well as improve on their ease of doing business.
The agreement ensures products and services from all 54 Countries can be exported or imported beyond borders without having to worry about multiple tariffs and trade barriers.