The African Development Bank (AfDB) has described free trade pact of the continent as a deal to help shift overreliance on volatile commodity exports and boost manufacturing.
It reports that sectors where African products already have a competitive advantage have the most to gain from the deal.
The agreement joins the markets of more than 50 countries, making it the largest freetrade zone in the world, AfDB President Akinwumi Adesina said in an interview in Niger’s capital, Niamey.
This was after Benin and Nigeria signed the African Continental FreeTrade Agreement on the weekend, paving the way for trade with reduced tariffs to start next July.
“Manufacturing, trading in valueadded products and strengthening supply chains will allow for markets to grow and for new markets to emerge,” Adesina said.
“SMEs that account for 80% of all trade on the continent will benefit, as well as the financial sector, as digital payments will be needed to transact.”
Commodity exports dominate even in Africa’s two biggest economies, with mining production accounting for about half of South Africa’s shipments while crude oil generates 90% of Nigeria’s foreign income.