The Africa Free Trade Continental Agreement: Its Implications and Benefits
The Africa Free Trade Continental Agreement (AFTCA) has been hailed as a game-changer for the continent`s economic growth and development. The agreement, which was signed in March 2018, seeks to create a single African market for goods and services. It aims to simplify trade among African countries, reduce tariffs, and increase intra-African trade. The agreement has the potential to bring about a significant transformation of Africa`s economy as it seeks to create opportunities for African businesses to expand and grow.
The agreement comes at a time when the continent is experiencing rapid economic growth, with the World Bank predicting that the African economy will grow at a rate of 3.4% in 2021. The AFTCA will be an essential catalyst for growth in this period, as it will increase access to markets, reduce the cost of doing business, and enhance competitiveness. The agreement will also create job opportunities for Africans and increase the continent`s bargaining power in the global market.
The AFTCA seeks to address the challenges that have hindered the growth of intra-African trade, such as poor infrastructure, trade barriers, and tariffs. African countries have traditionally been dependent on external markets for their goods and services; however, with the AFTCA, they will have access to a much larger market, which will encourage the growth of local industries and businesses.
One of the primary objectives of the AFTCA is to increase the level of intra-African trade. Currently, intra-African trade accounts for only 20% of the continent`s total trade. This is low compared to other regions such as Europe and Asia, where intra-regional trade accounts for 60% and 50% of total trade, respectively. The AFTCA seeks to raise the level of intra-African trade to 60% by 2022, which will be a significant boost to the continent`s economy.
The agreement also offers benefits to businesses looking to establish themselves in Africa. It provides a platform for businesses to expand their reach by accessing a much larger market. It also lowers the cost of doing business by reducing trade barriers and tariffs. This is particularly important for small and medium-sized enterprises, which often struggle to enter new markets due to high costs.
The AFTCA is expected to be a boost for the manufacturing sector in African countries. Increased access to a larger market will encourage the growth of local manufacturing industries, which will help to create jobs and enhance the continent`s competitiveness. The agreement will also encourage the movement of talent across the continent, which will promote innovation and knowledge transfer.
In conclusion, the Africa Free Trade Continental Agreement has the potential to be a game-changer for the continent`s economy. It seeks to increase intra-African trade, create jobs, promote local industries, and enhance competitiveness. The agreement will also lower the cost of doing business and provide a platform for businesses to expand their reach. As the continent continues to experience rapid economic growth, the AFTCA will be an essential catalyst for growth and development.
