Africa to establish free trade area by 2015: Zuma

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JOHANNESBURG, Aug. 20 (Xinhua) -- African countries are expected to establish a free trade area by 2015, combining the markets of 26 countries with a population of nearly 600 million people and a combined GDP of 1 trillion U.S. dollars, South African President Jacob Zuma said on Tuesday.

"Importantly, this will form the basis for an Africa-wide Free Trade Area, which could create a single market of 2.6 trillion U.S. dollars," Zuma told delegates attending the first meeting of the BRICS Business Council in Johannesburg.

This will enable African countries to further promote intra- African trade, Zuma said, adding that under the auspices of the African Union, African countries are launching an ambitious Tripartite free trade area, bringing together countries of Eastern and Southern Africa.

"Africa is becoming a remarkable success story which augurs well for the BRICS partnership," Zuma said.

BRICS is an acronym for the powerful grouping of the world's leading emerging markets, namely Brazil, Russia, India, China and South Africa.

At the 5th BRICS Durban summit in March, special focus was put on BRICS' cooperation with Africa.

The BRICS-Africa engagement and dialogue signals a new departure and a new avenue to take forward the continent's development agenda.

The ongoing meeting of the BRICS Business Council, which was set up at the Durban summit, will address three key issues -- investment opportunities, value-added trade and the BRICS Development Bank.

Zuma devoted much of his speech to the potentials of Africa. Africa's output, he said, is expected to expand by 50 percent by 2015, resulting in a 30 percent rise in the continent's spending power.

"It is becoming well-known as well that the rate of return on foreign investment in Africa is higher than in any other region in the world. This is not surprising given the competitive edge of the continent," Zuma noted.

Africa's advantages include its extraordinary mineral wealth and agricultural potential. South Africa's own mineral wealth is estimated at 2.5 trillion U.S. dollars. In addition, the continent has a young working population and a growing middle class with considerable and growing purchasing power.

In moves to promote intra-African trade, South Africa will play its own part to promoting investments within the continent, Zuma said.

Over the last few years, the South African Reserve Bank approved nearly 1,000 large investments into 36 African countries. These mutually beneficial investments generate tax revenue, dividends and jobs between countries.

"While we appreciate that our intra-African trade is still marginal, real barriers are not tariffs, but include other factors such as under-developed production structures and inadequate infrastructure," Zuma said.

He said Africa is poised to make further progress given the focus on improving systems and policies.

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