EAC, SADC, COMESA AGREE TO FORM AFRICA'S LARGEST TRADING BLOC

Half of Africa’s countries have agreed to take a historic leap forward and create the continent’s largest free trade area, a key step in boosting trade and growth.

The decision was taken in Bujumbura, Burundi, at the weekend by ministers from 26 countries that belong to the East African Community (EAC), the Common Market for Eastern and Southern Africa (Comesa), and the Southern African Development Community (SADC).

The Grand Free Trade Area, as the new bloc is to be known, will have a combined population of 625 million people and about half of all African Union member states.

Its combined Gross Domestic Product of U$1.2 trillion is about 58 per cent of Africa’s total GDP and would make the area roughly the sixteenth largest economy in the world, just below Mexico, and ahead of countries like Indonesia, Turkey, Netherlands, Saudi Arabia, and Switzerland.

Heads of states from the countries in the three blocs are expected to launch the expanded trade area when they meet in Egypt in mid-December.

“The Tripartite FTA offers significant opportunities for business and investment within the Tripartite and will act as a magnet for attracting foreign direct investment into the Tripartite region,” Sindiso Ngwenya, the Comesa secretary general and head of the tripartite taskforce said in a statement.

“The business community, in particular, will benefit from an improved and harmonised trade regime which reduces the cost of doing business as a result of elimination of overlapping trade regimes due to multiple memberships.”

The move is seen as crucial to eliminating trade and tariff barriers in participating countries, as well as overlapping membership by countries in different trading blocs.