African Continental Free Trade Area (ACFTA) 

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IR and Diplomacy  ->  International Relations

Topic :  GS Paper 2 - Bilateral, regional and global groupings and agreements involving India and/or affecting India's interests

The 18th Ordinary Session of the Assembly of Heads of State and Government of the African Union, held in Addis Ababa, Ethiopia in January 2012, adopted a decision to establish a Continental Free Trade Area (CFTA) by an indicative date of 2017. The Summit also endorsed the Action Plan on Boosting Intra-Africa Trade (BIAT) which identifies seven clusters: trade policy, trade facilitation, and productive capacity, trade related infrastructure, trade finance, trade information, and factor market integration.

The pact signed by 44 of the 55-member African Union (AU) in March-2018.

Benefits to African Continent:

  • Rating agency-Moody, points out that exports in manufactured goods within the continent are more than double the exports to countries outside it.
  • These findings buttress expectations that a continent-wide single market would enable Africa’s transformation from an exporter of commodities and raw materials to a supplier of finished manufactured goods.

Such trade diversification from relatively less labour-intensive sectors to value-added industrial products would in turn lead to sustained economic growth and employment generation.