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New free trade area to be set up in Southern Africa

Three of Africa’s key trade blocs are currently in talks concerning a merger. These blocs are the Common Market for Eastern and Southern Africa (COMESA), the Southern African Development Community (SADC), and the East African Community (EAC), and are currently negotiating to form the Tripartite Free Trade Area (TFRA).

This new free trade area could mean faster growth and less poverty in Southern Africa.

According to the World Bank, trade amongst countries in sub-Saharan Africa only accounts for 10% of total trade, which does not compare well to the 60% within Europe, 40% within North America and 30% within Asia. Ruth Kagia, head of World Bank operations in South Africa, said that by failing to do business with one another, Africans are missing opportunities for faster growth and more jobs.

In fact, the new organization would bring 26 countries together, totaling a population of around 700 million people and with a combined GDP which is estimated at $875 billion.

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Posted in Africa, International Trade

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