Africa Intercontinental Free Trade Agreement

The Africa Intercontinental Free Trade Agreement: What You Need to Know

The Africa Intercontinental Free Trade Agreement (AfCFTA) is a historic agreement among African nations to establish a single market for goods and services across the continent. Signed on March 21, 2018, in Kigali, Rwanda, the agreement aims to create a unified African market, boost economic growth, and increase employment opportunities.

With 54 member countries, the AfCFTA is the largest free trade area in the world in terms of participating countries. The agreement aims to eliminate tariffs on goods traded within the continent, promote intra-African trade, and enhance economic integration.

The AfCFTA is expected to increase intra-African trade by 52% by 2022, according to the United Nations Economic Commission for Africa. The agreement has the potential to create a market of 1.3 billion people, with a combined GDP of $3.4 trillion.

The agreement will be implemented in phases. The first phase, which began on May 30, 2019, aims to eliminate tariffs on 90% of goods traded within the continent. The remaining 10% of goods will be phased out over a period of five years. The agreement also includes provisions for non-tariff barriers, such as customs procedures and technical regulations, to be addressed.

The AfCFTA represents a significant step towards economic integration in Africa, which has historically been hampered by high tariffs, non-tariff barriers, and weak infrastructure. The agreement is also expected to promote regional value chains and encourage the development of small and medium-sized enterprises.

Despite its potential benefits, the AfCFTA faces some challenges. Some countries have expressed concerns about the impact of the agreement on their economies, particularly on their domestic industries. The agreement also requires significant investments in infrastructure and border management to facilitate trade.

To maximize the benefits of the AfCFTA, African countries must work together to address these challenges and create an enabling environment for trade. This includes investing in infrastructure, improving customs procedures, and developing mechanisms to address non-tariff barriers.

Overall, the AfCFTA represents a historic opportunity for African countries to boost economic growth, increase employment opportunities, and promote regional integration. As the agreement is implemented over the coming years, its impact on the continent`s development will be closely watched.