The AfCFTA‚ which will remove barriers to trade such as tariffs and import duties and allow the free flow of goods and services between member states‚ is regarded as the foundation for the continent's economic development but still has to be ratified by each of the signatories. It is only due to come into force in six months’ time. Ten member countries of the African Union including Nigeria refused to sign the deal.
"The AfCFTA is an economic imperative to address the challenge of small and fragmented markets. It is also being established at a time when the multilateral system is facing challenges‚" Davies said.
He said it was essential to create a market of sufficient size to support deep industrialisation and the diversification of the economies of African countries. The combined nominal gross domestic product of the African continent is $3.3-trillion.
In 2017 the African market was worth R23.5bn for South African exports and it imported R8.6bn from African countries which made the continent critically important‚ Davies said. A significant part of the exports consists of value-added products.
The minister stressed the need for the AfCFTA to be complemented by cooperation on industrial and infrastructure development which were key components of the development integration approach which South Africa supported and which the minister said would ensure that the continent addressed productive and supply-side constraints.
- BusinessLIVE