The African Continental Free Trade Agreement (AfCFTA) is the first step towards an economic bloc which will join over 1.2 billion people.
On Thursday, 24 African nations enacted the African Continental Free Trade Agreement (AfCFTA), an economic integration mechanism that will make it the world's largest trade zone.
"Historical milestone!" the Trade and Industry Commissioner of the African Union Albert Muchanga said who added, "we celebrate the triumph of the courageous, pragmatic and continental commitment to economic integration."
The AfCFTA, which will consolidate US$3.4 billion in trade and 1.2 billion consumers, will be implemented July 7 at an AU summit to be held in Niamey, the capital of Niger. This integration project encompasses some of the most powerful economies in Africa, such as Egypt, South Africa, Ethiopia and Kenya.
"We follow the legacy of our ancestors who gave us political liberation to bequeath the continent's economic integration," Kenya's President Uhuru Kenyatta said, stressing that "we must find a way for all of us to win."
So far, 52 out of 55 member states of the African Union have signed the agreement that was drawn up March 21, 2018 at the AU summit in Kigali. Only three countries still have no signed the AfCFTA, namely, Eritrea, Benin and Nigeria, the largest African manufacturing economy.
The African leaders are looking to implement a single market to allow the free movement of workers and investments across the continent.
"This is only the beginning. We have to move later towards a customs union, a common market, a monetary union and an economic community," said Trade Commissioner Muchanga, who said the whole process could still take "many years".
"The history of Africa's fragmentation has not done us any good," commented the AU commissionerr, stressing that multilateral cooperation is of "paramount importance" for the continent.
In the short-term, the AfCFTA will increase trade among its members by more than 50 percent by 2022, according to the United Nations Economic Commission for Africa (UNECA).
The application of the agreement, however, will not be easy, due to such factors as the enormous heterogeneity of countries, the lack of infrastructure, and the possible lack of consensus on tariffs.
"There will be winners and losers," said Trudi Hartzenberg, director of the Trade Law Center (Tralac). She explained that African countries with more advanced manufacturing industries will have a competitive advantage.
The AfCFTA also includes 34 less developed countries, 16 of which lack access to the sea and are among the world's poorest economies.