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African nations approve $3 trillion trade bloc, without South Africa, Nigeria

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African nations approve $3 trillion trade bloc, without South Africa, Nigeria

African countries agreed to create a $3 trillion bloc to boost intra-regional trade without South Africa and Nigeria, the continent's two biggest economies, Reuters reported.

While the reason for Nigeria's decision to remain out of the bloc is unclear, South Africa's President Cyril Ramaphosa expressed his willingness to sign up once the required legal processes were satisfied. African Union Trade Commissioner Albert Muchanga reportedly said that both South Africa and Nigeria would join the bloc soon once their ongoing national-level consultations are over.

Other countries opting out of the continental free-trade zone include: Benin, Botswana, Eritrea, Guinea Bissau, Lesotho, Namibia, Sierra Leone and Zambia, according to the report.

The African Union initially intended to sign up 55 nations, which would have made it the world's largest trade bloc by member states, and required the inclusion of at least 22 nations for the project to proceed. Rwandan President Paul Kagame declared the initial negotiations a success after 44 African countries signed up in 18 months.

The move comes with world leaders calling for further dialogue and actions on trade amid fears that protectionist sentiment is spreading across the globe.

The Reuters report noted that there are already a number of competing trade zones established in Africa including: COMESA in the east and south, EAC in the east, ECOWAS in the west and SADC in the south.

Businesses have been critical of the stringent regulations on trade in Africa, citing it as a reason for trade disruptions.

"Some countries all of a sudden decide they are going to do a quality check on goods, but they don't really know what they want to check. That slows the trade," said Thomas Schafer, CEO of Volkswagen Africa. "We are not able to bring a vehicle from South Africa into Zimbabwe in a cost-efficient and fast way. That needs to change."