It’s here. What is here ?
The African Continental Free Trade Area (AfCFTA) Agreement
The African Continental Free Trade Agreement (AfCFTA) will make Africa the largest global trading bloc since the establishment of the WTO in 1994, in terms of the number of countries involved (with a combined GDP that is currently worth over two trillion dollars a year) and the population concerned (1.2 billion people) .
The conclusion of a trade agreement does not guarantee new trade flows. For that to happen, the reasons why trade between certain countries is at low levels must be addressed.
As it stands, many countries across the continent are heavily dependent on commodity exports. Nine out of the region’s top ten sector exports are raw materials. The reliance is particularly evident in Sub-Saharan Africa, where oil and gas exports averaged US$171 billion in 2018, making it the largest exported commodity, with precious metals taking second place.
Optimism for the agreement is shared not only among signatory states, but also by global financial institutions such as the IMF who project an impressive boost in intra-African trade of 52.3 percent by 2022.
Overcoming the hurdle of modest intra-African trade is at the core of the AfCFTA’s intentions. Exports within the region currently make up a mere 19 percent of total trade volumes, which pales in comparison to intra-Asia trade at 59 percent and intra-Europe at 69 percent.
The AfCFTA represents a window of opportunity for African countries to promote intra-African trade, diversify and structurally transform the continent’s economy, and pursue important human rights and anti-poverty goals. However, the harmonization of national priorities to achieve regional and global public goods will require firm political will, determination and coordinating efforts by African political leaders.