Title: The African Continental Free Trade Area (AfCFTA): an opportunity to stimulate intra-African trade
Introduction :
The creation of the African Continental Free Trade Area (AfCFTA) raises many hopes for the development of the African continent. Indeed, this initiative aims to reduce trade barriers and harmonize regulations and standards within African Union member countries. In this article, we will explore the benefits of the AfCFTA in terms of boosting the African market and developing intra-African trade.
Increase in intra-African trade:
According to a recent report from the Foundation for Studies and Research on International Development (FERDI), intra-African trade represents only about 16% of the continent’s total trade. This is a figure well below the intra-regional trade seen in other parts of the world. For example, in Europe, intra-European trade reaches 60%, while in North America and Southeast Asia it stands at 40% and 30%, respectively. The weak regional integration in Africa is mainly due to multiple existing trade barriers, such as high tariffs, complex customs procedures and insufficient transport infrastructure.
The AfCFTA, by removing or reducing these barriers, could have a significant impact on intra-African trade. According to projections in the FERDI report, once fully operational, the AfCFTA could increase intra-African trade by more than 34% by 2045. This would create an attractive market of 1.2 billion potential consumers and a cumulative GDP of more than 2.9 trillion dollars.
The advantages of the AfCFTA:
One of the main benefits of the AfCFTA is the stimulation of African demand. By harmonizing regulations and standards, the AfCFTA facilitates trade between African countries, which will encourage companies to invest in the continent to meet growing demand. It could also attract international investment as foreign companies seek to take advantage of the growing African market.
Furthermore, the AfCFTA could reduce Africa’s vulnerability to external shocks, such as fluctuations in commodity prices. By promoting intra-African trade, the continent would become less dependent on external markets and would be able to develop a more diversified economic base.
Promoting industrialization is also a key objective of the AfCFTA. Currently, Africa’s contribution to global manufacturing value added is low, which means that African production is mainly located upstream of the value chain and is poorly processed.. By promoting the integration of African production into the global value chain, the AfCFTA will encourage industrial development and the creation of value-added jobs on the continent.
Conclusion :
The AfCFTA represents a real opportunity to stimulate intra-African trade and promote the economic development of the continent. By reducing trade barriers and harmonizing regulations, it will help create an attractive market of more than 1.2 billion potential consumers and boost economic growth in Africa. However, for the AfCFTA to achieve its ambitious objectives, it is essential that all African Union member countries fully commit to its implementation and work together to overcome the challenges that arise.