African free trade area

English: Map of the African Union with suspend...

AMBITIOUS PLANS to create a continental free trade area in Africa, first suggested 21 years ago by regional leaders, were recently adopted by the African Union. The union says the free intra-African economic trading system should be operational by 2017.

On January 31st at the union’s 18th summit in Addis Ababa, Ethiopia, governments were told they needed to build infrastructure worth an estimated €46 billion over the next 10 years to facilitate the free trade zone across the continent.

While this target was acknowledged as challenging, Ethiopian prime minister Meles Zenawi was mandated to lead a seven-member heads of state committee, called the high-level African trade committee, to look into ways of raising the funds required.

Africa, my dream.

The taxation of aid money in Africa, taxes from minerals and mining deals and revenues drawn from dealings with banks and multilateral bodies have all been suggested as ways to fund the continental trade boost.

“We are determined to address the issue of stability and lead to the prosperity of our continent,” African Union chairman Yayi Boni said. “We have to ensure growth rate is above the population growth in Africa.”

The development of trade between African states has increasingly become a priority for the African Union because of its member states’ inability to tackle widespread poverty, despite annual economic growth rates above 5 per cent in many member states over the past decade.

Although African economic growth slowed in 2009 due to the global recession, regional gross domestic product (GDP) was well above rates posted in countries in Europe and the US.

By 2010, the continent had bounced back with GDP doubling to 5.4 per cent that year, according to the World Bank.

Nevertheless, despite this success South African president Jacob Zuma has pointed out that less than 10 per cent of Africa’s trade is between its states and that boosting this area should be a priority as a way to further develop the continent.

via Major challenges remain for African free trade area – The Irish Times – Mon, Feb 13, 2012.

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