The AfCFTA: A Catalyst for Africa’s Economic Transformation
The African Union is finally getting concrete! The African Continental Free Trade Area (AfCFTA) is an answer to the previously over-asked question: what is the use of the AU? AfCFTA is groundbreaking agreement that aims to create a single market for goods and services across the African continent. By eliminating tariffs and quotas, the AfCFTA will significantly boost intra-African trade, driving economic growth, job creation, and wealth creation.
One key objective of the AfCFTA is to enhance industrialization and boost manufacturing capabilities. By creating a larger market for goods produced on the continent, the agreement will incentivize companies to invest in local production facilities and value-addition. This should spur innovation, technology transfer, and skill development in various sectors.
Furthermore, the AfCFTA aims to enhance infrastructure development within Africa, improve transportation networks, streamline customs procedures, and harmonise regulations to ease the cost and speed of intra-Africa trade. AfCFTA also seeks to foster regional integration and solidarity among African nations, which would encourage collaboration and partnerships, creating a unified African market that can effectively compete on the global stage.
Why should all this matter to every African? Several reasons:
- Significant leaps in job creation in Africa (presently faced with increasing youth unemployment).
- Enhanced wealth creation through meaningful intra-African trade
- Stimulation of Africa’s manufacturing and value addition, further creating market-induced wealth
- General improvement of household livelihoods as value chain actors in different sectors
- Potential to attract greater foreign direct investment (FDI) into Africa, as the continent becomes a more attractive destination for businesses looking to tap into its vast market potential.
But all these potential advantages are there for the taking. When and if African leaders look beyond narrow national and self-interests, they can jointly tap enormous potential. At FRIENDS Consult, we look forward to working with entrepreneurs and governments to aid access and optimize of the benefits afforded by the AfCFTA
Keren Obara.
Digital Marketing Associate.
Further reading:
- African Union: https://au.int/ United Nations Economic Commission for Africa (UNECA): https://www.uneca.org/
3) World Bank: https://www.worldbank.org/en/home 4) African Development Bank: [https://www.afdb.org/en