Advantages Of Africa Free Trade Agreement

The full text of this publication is for leaders across the continent are generally optimistic about the AfCFTA. In the latest obG survey, which surveyed 787 senior managers in eight African markets in 2018, 72% of respondents believed that AfCFTA would have a positive or very positive impact on the level of intra-regional trade. Together, these developments offer significant economic opportunities for both regional companies and international investors. African leaders from 44 African nations met at the African Union summit in Kigali, Rwanda, March 17-21, 2018, and signed the Continental Free Trade Agreement (AfCFTA) for the creation of the world`s largest internal market. The agreement will be the largest trade agreement in history since the creation of the World Trade Organization. (1) The agreement will make the regional bloc the largest free trade area in the world in terms of the number of participating countries since the creation of the World Trade Organization in 1995. According to a 2018 report by the United Nations Economic Commission for Africa (UNECA), it is expected to have a transformative effect on participating markets, with the agreement reaching a 52% increase in intra-African trade by 2022. UNCTAD anticipates a number of long-term economic benefits from the full implementation of the agreement, including a total of $16.1 billion per year and a halving of the continent`s trade deficit, GDP and employment growth of 0.97% and 1.17% respectively. MAN President Frank Jacobs told Nigerian media that the country`s private sector had not been consulted on afCFTA and warned that the deal could kill Nigerian industry and fuel unemployment. He said the government needed to explain its plan to protect 10% of the products and enforce the rules of origin provision.

Although full implementation of the agreement is expected to take a few more years, AfCFTA could be an important milestone in the continent`s history and could lay the foundations for a fully integrated African economy in the long term, with people, goods and services capable of freely circulating. Nevertheless, considerable efforts will be required on the part of the signatories to ensure that the benefits of the agreement are fully realized. At present, the level of intra-regional trade is significantly lower than in other regions of the world. Intra-African exports were only 16.6% in 2017, compared with 68% in Europe, 59% in Asia and 55% in North and South America, according to UNCTAD. The report, based on surveys by the international law firm Baker McKenzie and Oxford Economics, contrasts with the need to import finished products from Africa. As a percentage of GDP, manufacturing in Africa averages 10%, but AfCFTA offers a chance that this will increase with the opening of markets.