22 Mar 2018

Africa agrees deal for Continental Free Trade Area

4:49 pm on 22 March 2018

The leaders of 44 African countries have signed a deal to create one of the world's largest free trade blocs.

Heads of state from African governments pose during the African union summit.

Heads of state from African governments pose during the African union summit. Photo: AFP

But 10 countries, including Africa's largest economy, Nigeria, refused to sign the deal.

The agreement was signed at a summit in the Rwandan capital, Kigali. It was hoped the deal would come into force within six months, and increase prosperity for 1.2 billion Africans. All the signatories' had to vote in their national parliaments before the bloc was realised.

The African Continental Free Trade Area would remove barriers to trade, like tariffs and import quotas, allowing the free flow of goods and services between its members.

African Union commission head Moussa Faki Mahamat called it a "glorious challenge... which calls for the courage to believe, the courage to dare... the courage to achieve".

Trade between African countries was relatively low. It accounted for just 10 percent of commerce on the continent, compared with 25 percent in South-East Asia, according to news agency Reuters.

Once the free trade area was established, the ambition was to take further steps echoing the creation of the European Union, BBC's Africa Business Report editor Matthew Davies said.

It was hoped it would have a common market and a single currency.

However it had to overcome large barriers, such as getting Africa's largest economy, Nigeria, on board.