With Africa’s international trade pattern having changed dramatically since the turn of the century, the development of the African Continental Free Trade Area (AfCFTA) agreement is expected to facilitate an inclusive and sustainable platform through which the continent may promote industrialization, job creation, and the competitiveness of African industries on the global stage through intra-African trade.
“Africa’s growth has been at its ultimate upturn in recent years,” stated Goolam Ballim, Chief Economist and Head of Research at Standard Bank, one of South Africa’s major banking and financial services groups, in Cape Town on 10 March, adding that, “For example, since the early-2000s, the continent had the region’s big economies grow even further; with Nigeria bringing in nearly 8%, Angola 2%, and South Africa rushing ahead with nearly 5% chain growth over the last 22 years.”
By taking advantage of Africa’s vast, dynamic, and diverse resources, the AfCFTA will accelerate trade across the continent by providing a mutually beneficial trade agreement that covers goods, services, investment, intellectual property rights, and intra-continental trade policies. This agreement will present a major opportunity for Africa to bring up to 30 million Africans out of extreme poverty and take advantage of the continent’s combined GDP of $3.4 trillion.
“We know that over the next 30 years, two-thirds of humanity is going to be residing between Africa and Asia, and of course, the rising level of capital incomes are projects to grow as well,” concluded Ballim, who highlighted that African trade with Asia has grown exponentially in recent years, outpacing trade with Europe and North America.
With aims to reduce tariffs among member countries and covering policy areas in trade facilitation and services, the full implementation of the AfCFTA agreement is expected to reshape African economies and markets, diminishing reliance on other parts of the world while boosting intra-continental industrial sectors, such as the exploration, production, and exportation of natural resources, while also serving to diversify exports, accelerate socioeconomic growth, and attract foreign investment.