The African Union announced that the first commercial deal under the African Continental Free Trade Area (AfCFTA) is expected to take place on January 1, 2021 as outstanding discussions will take place online.
In April, the Secretary General of the AfCFTA Wamkele Mene said implementation of the free trade agreement will not be able to commence on July 1 as planned due to the disruptions occasioned by the coronavirus pandemic.
The AU maintains that the AfCFTA will offer Africa an opportunity to reconfigure its supply chains, reduce reliance on others and speed up the establishment of regional value chains which will boost intra-Africa trade.
A report by the World Bank said the successful implementation of AfCFTA would mitigate negative COVID-19 effects on economic growth by boosting regional trade and reducing trade costs.
It added that most of the AfCFTA’s income gains are likely to come by cutting red tape and simplifying customs procedures.
Furthermore, it said, the AfCFTA could also help increase resiliency to future economic shocks by replacing regional agreements, streamlining border procedures and prioritizing trade reforms.
According to the United Nations Economic Commission for Africa, the AfCFTA is, by the number of participating countries, the largest trade agreement since the formation of the World Trade Organisation. Its implementation will form a $3.4 trillion economic bloc with 1.3 billion people across the continent.