Experts say Africa’s free trade agreement could boost trade among African nations by 60 percent in just three years. The agreement will join the markets of 50 countries; unite the continent’s 1.27 billion people and its add to its $3.4 trillion nominal GDP.

The African Union (AU) finally launched the operational phase of the African Continental Free Trade Agreement (AfCFTA), after 17 years of negotiations. African countries with access to ports, railways, and airports will benefit the most from the new trade pact, making it the largest free trade zone in the world.

The agreement will cut tariffs for majority of the country up to 90 percent in the next five years, thereby, easing trade in the continent. African Development Bank President Akinwumi Adesina told the media that, “Manufacturing, trading in value-added products and strengthening supply chains will allow for markets to grow and for new markets to emerge. SMEs that account for 80 percent of all trade on the continent will benefit, as well as the financial sector, as digital payments will be needed to transact.”

The experts also highlighted the challenges that it could face such as bad transporting facilities, non-existent roads and rail lines, bad governance, corruption, and deeply entrenched bureaucracy. According to Akinwumi Adesina, the lack of infrastructure could be a major challenge. The continent’s infrastructure funding needs are at $130 billion to $170 billion a year, with a gap in the range of $68 billion to $108 billion.

He also added that the mechanics of the deal has to be negotiated. He stressed that the establishment of a digital system for payments converging one country’s currency to another membe’rs is vital before trading starts. The Economic Community of West African States plans to adopt a common trade currency to reduce foreign exchange risk.

The member nations will be provided with $4.8 million by the African Development Bank to set up the free trade zone’s headquarters in Ghana.

The post Africa’s free trade agreement to boost trade among its nations by 60% appeared first on International Finance.

President of the European Council, Donald Tusk said the agreement is the “largest bilateral trade deal ever.” In a written statement, he added: “Relations between the European Union and Japan have never been stronger.”

“Geographically, we are far apart. But politically and economically we could hardly be any closer.”

At present, the EU products are subject to an average tariff of 1.6% when they come into Japan, and the Japanese products are imposed tariffs of 2.9% in the European Union, observed the World Trade Organisation. 

In reference to the deal, Baker McKenzie partner Ross Denton said: it is “a very strong signal to the US Administration that the EU and Japan, two major trade partners of the US, both see the benefits of removing barriers and reducing, not increasing tariffs.”

The post EU and Japan sign trade agreement appeared first on International Finance.

“We work on joint projects in the field of agriculture, energy and defense. The partnership in growing wheat and processing meat are also on our agenda. All those developments are accelerating the signing process.”

The post Ukraine attracts Turkish investors towards privatisation appeared first on International Finance.