Nigeria, the biggest economy in the African continent, has just signed the African Continental Free Trade Areas agreement (AFCTFA) at opening of the 12th Extraordinary Session of the Assembly of African Union Heads of State and Government in Niger.
Getting Nigeria on board AfCFTA means African union’s dream of increasing intra-Africa trade is one step further from becoming a reality. Africa still trades more with Europe than it does within itself.
President Buhari signing the AfCFTA in Niger
Free trade agreements have a lot of economic benefits as they cut trade tariffs between member countries. The elimination or reduction of tariffs increase the volume of trade and commerce between member countries and often accelerate economic growth.
The African union says that once AfCTFTA is in place, it will create the world’s largest free trade area and boost intra-Africa trade by approximately 60% within the next 3 years.
Tariffs are trade tax placed on goods coming into a country. Many countries have tariffs to protect home-made products, but they often limit trade between countries.