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Opinion: The African Continental Free Trade Agreement & Why You Should Care

For a second, envision a self-sufficient utopian Africa where coffee is sourced from Uganda instead of Brazil, vehicles from Kenya instead of Europe, and clothing from Ethiopia, not Bangladesh. Take this moment to bask in the idea of having African products manufactured by Africans for Africans – this is but a fraction of what the AFCFTA is hoping to achieve.

For decades, Africa has been a supplier of a wealth of raw materials, but never a significant value-add manufacturer of actual products. However, after decades of negotiations, deadlocks, and stall tactics, an agreement has been reached that could be the catalyst for substantial continental economic development. Of course, we all approach this with, not just a hint, but an abundance of scepticism. After all, financial pundits have been claiming expedited growth in Africa for years, with the Economist magazine even using the headline “Africa Rising” as a cover story. The reality is that story ran close to a decade ago. Still, the African continent lags in the shadow of the modern world, primarily used as a continental commodities garage than a genuine global partner. This perceived pessimism is not intended to deflate your outlook on the African continent’s future, but rather emphasise just how tremendous the opportunities are for this sleeping giant.

The AFCFTA would connect a market of 1.3 billion people across 55 countries, with a combined GDP of $3.4 trillion (according to the World Bank), making it the most extensive free market area in the world. Intracontinental trade in Africa is meagre. According to UNCTAD, intracontinental trade accounted for just 14% of total trade in 2017 compared to 68.1% in Europe and 58.8% in Asia. According to the United Nations Economic Commission for Africa, the AFCFTA has the potential to increase trade amongst member countries by more than 50%. But, one big question still lingers in the optimism of those predictions – What makes the AFCFTA different to all the other silver-bullet trade deals that African regions have proposed, implemented and subsequently ended in failure?

Unfortunately, as you may have suspected, the answer to that question is complicated. Africa is a continent of big ideas and, sadly, little action. However, the AFCFTA has got some encouraging differences from all its predecessors. The chief amongst these differences is the political will be shown by member countries to work toward a common goal, something the African continent has very rarely experienced. Other contributing factors include the need for as many economically stimulating tools one can enjoy in the post-Covid-19 world and the realisation that regional supply chains carry business benefits that may even outweigh initial costs.

Whether you see the AFCFTA as another project waiting to fail before it even starts, or remain confident in its ability to transform our lives and continent, you cannot ignore it. It may take years before Africa sees any real benefits from the AFCFTA. Still, the fact remains the same – those who understand it best and what it means for trade within Africa will be able to navigate a new normal and stand the best chance of capitalising on the inevitable opportunities that will present themselves.

Corban Thomson – Studying with the International Trade Institute of South Africa

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