(Center for China-Africa Trade Research) During the 12th special summit of the African Union (AU) decided to set up the secretariat of the African Continental Free Trade Area (AfCFTA) in Ghana. Ghana defeated other competing countries, including Egypt , Svadini, Ethiopia , Kenya , Madagascar and Senegal to win the bid.
The African continent free trade zone will cover a market with a population of 1.2 billion and a GDP of US$2.5 trillion. As a free trade zone, member states gathered together and agreed not to impose tariffs on goods and services, setting quotas and other trade barriers.
This agreement is expected to expand the market and diversify exports, especially the finished goods market. Intra-Africa trade accounts for about 14%. Trade volume between Asian countries is much higher, at 59%. The trade volume of European countries is even as high as 69%. The agreement hopes that the African Free Trade Area will increase trade across the continent by 52% by 2022.
The core task of the Secretariat is to implement the Free Trade Agreement, which has been approved by 25 of 54 countries.
This is the first time that it has been selected to be the seat of the International Secretariat. Adis Ababa (the capital of Ethiopia) is the seat of the African Union headquarters, while Nairobi (the capital of Kenya) has two of the largest bodies of the United Nations, and South Africa is the host of the Pan African Parliament.
When bidding, Ghana used its strategic geographical location in West Africa to make the country a gateway and trade center for West Africa. One of the favorable factors that made Ghana’s successful bid was the country’s economy showing a strong growth trend.
Ghana is one of the fastest growing economies in the world, with an average GDP growth rate of about 6%. In addition, Ghana can be said to be one of the most stable countries in West Africa.
Since its establishment in 1990, Ghana has been one of the 15 member states of ECOWAS. The regional agency established a joint external tariff in 2015. Ghana hopes that the establishment of the AfCFTA secretariat will promote the development of the hospitality industry and the broader service industry. (Edited by: China-Africa Trade Research Center)
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