On the 1st of July 2018, South Africa, Lesotho, Namibia, Burundi and Sierra Leone signed an African Continental Free Trade Agreement, under the theme, Winning the fight against corruption: A Sustainable path to Africa’s Transformation. The meet was held in Nouakchott, capital of Mauritius.
The agreement will increase intra-regional trade and encourage grounds for investment between the countries. It is good news for SMEs in countries that participated in the agreements as it lifts monetary hurdles involved in exporting goods in between nations – as funds tend to be one of the major challenges of small businesses.
And will help in surging up demand in the country, which opens up business opportunities in the market and room for small businesses to thrive. It also boosts comparative advantage, inciting healthy competition. The announcement brings spells good news to small businesses in the trading industry.
What this free trade agreement hopes to achieve is economic growth, that is believed to subsequently improve the quality lives of the citizens, who will, in turn, have more money to spend and further increase demand.
“This agreement is an important step towards South Africa’s participation in a market of over 1 billion people and will create opportunities and many benefits for South African, which would enable South Africa companies to export goods and services across the continent. It will contribute to the growth and diversification of our economy and therefore create jobs as well as reduce inequalities and unemployment,” said South African president, Cyril Ramaphosa.
The free trade agreement signals good news for small business to compete with big corporations when exporting goods and services in Africa, with fewer restrictions and tariffs.
44 African countries initially agreed on the free trade deal on the 21 March 2018. The other members ( South Africa and Namibia) signed on the 1st of July. This was because they wanted proper consultation and clarification of terms of the agreement with their governments.
Quote courtesy: Allafrica.com
Image Courtesy : SABC News