Tashkent, Uzbekistan (UzDaily.com) - The Continental Free Trade Area (AfCFTA), which was created in accordance with an agreement signed by African countries, began functioning in Africa.

AfCFTA is a pan-African multidimensional agreement covering trade in goods and services, investment, intellectual property rights and competition policy. In terms of the number of participating States, coverage of population and territory, it is the largest association in the world. The agreement was signed by 54 countries of the continent out of 55. Eritrea is still outside the scope of the document, due to friction with neighboring Ethiopia.

Despite the unprecedented geographic size of the free trade zone, the continent’s total GDP does not exceed US$3.4 trillion, which is 4 times less than that of the eurozone countries, and 6 times less than that of China.

According to the United Nations Conference on Trade and Development (UNCTAD), in 2019, inter-African trade accounted for only 17% of the total exports of all countries on the continent. The largest country in terms of trade in Africa is South Africa. It is followed by Nigeria and Egypt. African countries account for only 2.6% of global trade, which is conducted mainly with Europe, India and China.

Experts, analyzing the beginning of the functioning of the continental free trade zone in Africa and its prospects, note the following.

1. African countries have previously adopted many common ambitious plans for the development of trade and economic relations, which have not led to the expansion of inter-African trade.

2. Large African economies will benefit greatly from AfCFTA, while others will be unable to save their national industries from import dumping.

At the same time, estimates made by the Economic Commission for Africa (UNECA) show that the AfCFTA has the potential to increase inter-African trade by 52.3% by lifting import duties and doubling it if NTBs are reduced.

In general, experts believe that despite all the problems, AfCFTA will serve the development of trade between African countries, will allow them to develop their own value chains. The competitiveness of the industry will also increase through opportunities for large-scale production, access to the continental market and better reallocation of resources.