TechInAfrica – Africa’s largest economy agreed to join a broad free trade agreement aimed at stimulating manufacturing industry across the continent. Eritrea is therefore the only African country not to be part of the trading bloc.
Nigerian President Muhammadu Buhari signed this historic agreement at the African Union (AU) summit in Niger few hours ago. The agreement should stimulate regional trade and allow companies to develop and enter new markets. Manufacturing currently accounts for only about 10 per cent of the African Union’s combined GDP of $3.4 trillion, and the trade agreement could make this sector more competitive and productive.
Initially, Nigeria feared that by exposing its manufacturers to increased competition, the agreement would lead to the bankruptcy of some of them and increase unemployment. But after reviewing an impact assessment of the trade agreement in June, Buhari agreed to join the free trade area.
With Nigeria’s accession, AfCFTA’s dream of increasing intra-African trade, which is currently lagging behind the volume of trade the continent does with Europe, is now closer. Now that AfCFTA can offer access to the huge Nigerian market, they are in a much better position to negotiate with regional bodies in other parts of the world.
But why was Eritrea excluded?
Eritrea did not participate in the negotiations because of its conflict with Ethiopia, according to AU Commission Trade and Industry Commissioner Albert Muchanga.
He added that now the two countries are at peace and that Eritrea has asked the AU to reach an agreement with them. They might be joining the agreement in the coming months.
Source: BBC News