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The American “Bloomberg” network said that the African free trade agreement could help achieve more than 84 billion dollars in untapped intra-African exports, according to a new report issued by the African Export-Import Bank.
Afreximbank said that if export potential is tapped under the deal, intra-continent trade could rise to over $ 231 billion, or about 22% of total African trade, even if all other conditions remain the same.
Trade within the African Continental Free Trade Area is set to start from January 1. The region could be the world’s largest free trade area by region with a potential market of 1.2 billion people and a combined GDP of $ 2.5 trillion, when the deal is fully operational by 2030.
According to the bank’s report, most of the untapped gains will come from southern Africa, from sectors that “have already proven their ability to compete internationally and have good prospects for export success in other African markets,” such as metal commodities, machinery, food products, vehicles, spare parts and plastics.
The report added that the greater export potential of southern Africa as well as North Africa “reflects to a large extent the experienced nature of the economies of South Africa and Egypt in a region where industrial products and manufactured goods are the main driver of formal cross-border trade. South Africa and Egypt account for about half of the export potential in Egypt.” Their area.
While global trade declined by 2.89% in 2019 partly due to tensions between the United States and China, total merchandise trade in Africa shrank by just 0.13% to around $ 1 trillion, according to data from Afreximbank. The smaller decline reflects efforts to boost intra-continental trade and “benefit from diversification of trading partners to maintain economic growth and trade expansion,” the bank said.
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