By Sikonathi Mantshantsha - Jun 12, 2011 -- Bloomberg
The leaders of three African regional economic blocs signed an agreement to develop a free trade zone stretching from Cape Town to Cairo.
The so-called Grand Free Trade Area would encompasses 26 countries, 600 million people and have an estimated gross domestic product of about $1 trillion, according to a statement released after a conference in Johannesburg today.
“The establishment of a Tripartite Free Trade Area will bolster intra-regional trade by creating a wider market, increase investment flows, enhance competitiveness and develop cross-regional infrastructure,” according to the statement.
The meeting was attended by leaders from the Southern African Development Community, the Common Market for Eastern and Southern Africa, and the East African Community. It is their second since an initial summit in October 2008. They agreed to further negotiations, without publishing any timeframes.
South African President Jacob Zuma told a press conference that Africa needs to remove hurdles to the movement of goods across boundaries and that infrastructure development must lift intra-Africa trade “from the current low base of 10 percent.”
South Africa, the continent’s largest economy, is driving regional integration as it seeks to create a larger market for companies such as Shoprite Holdings Ltd. (SHP), Africa’s biggest retailer. Africa’s economy has grown an average of 5.7 percent each year over the past decade, according to the International Monetary Fund, fueling the expansion of a new middle class.