Nigeria Signs African Free Trade Area Agreement

Nigeria has signed an agreement which aims to increase trade between African countries. The move leaves Eritrea as the only African country not to be part of the trading bloc.

Nigeria’s President Muhammadu Buhari signed the landmark agreement at the African Union (AU) summit in Niger. The first step of the agreement is to cut tariffs for goods from countries within the bloc but the timeframe to do this is yet to be confirmed.

The AU has said that the African Continental Free Trade Area - AfCFTA - will create the world’s largest free trade area. It has also estimated that implementing AfCFTA will lead to around 60% boost in intra-African trade by 2022. At the moment only 16% of international trade by African countries takes place between African countries, according to research by the African Development Bank.

Currently intra-Africa trade that exists ranges from fresh fish from Seychelles to Petrol from Angola.

AfCFTA hit a hurdle last year when Nigeria pulled out days before the country was due to sign the agreement.

Nigeria is Africa's biggest economy and has long been a regional leader so, when it stalled, observers questioned if the African trade bloc would ever actually happen.

The fact is Nigeria has a lot to gain from increasing access to its goods and services to a wider African market. But many of those consulted feared increased regional integration had the potential to lead to unfair competition for jobs and the goods they produce.

With Nigeria signed up, AfCFTA's dream of increasing intra-Africa trade, which currently lags behind the volume of trade the continent does with Europe, is now one step closer.  Now that AfCFTA can offer access to the enormous Nigerian market, they are in a much stronger position to negotiate with regional bodies in other parts of the world.