A former Minister of State, Mr. Charles Adu Boahen, has unveiled a roadmap for propelling intra-African integration through the African Continental Free Trade Area (AfCFTA).
This is to draw parallels to the transformative impact of NAFTA in North America. As 55 African nations rally behind this initiative, aiming to dismantle trade barriers and create the world’s largest free trade area, the potential for shared prosperity and economic empowerment on the continent becomes increasingly tangible.
NAFTA, or the North American Free Trade Agreement, was signed into being in 1994. This formalised an agreement between the United States, Mexico, and Canada to eliminate tariffs between the three countries so that North American free trade could flourish.
NAFTA, reports Quartz, has resulted in GDP increases, standardisation and liberalisation of markets, and more intellectual property rights. Though not without its shortcomings, it has been considered an overall success in uniting the interests of the North American continent.
AfCTFA, or African Continental Free Trade Area, seeks similar outcomes across Africa. This initiative, which has been signed by 55 countries from the African Union as well as eight regional economic countries so far, will create the world’s largest free trade area.
Specifically, AfCTFA’s elimination of trade barriers will open up an intra-African market to 1.3 billion people, and is expected to lift overall GDP to approximately $3.4 trillion USD. In consequence, 30 million people will be able to leave poverty behind, and Africans in total will see a 7% income boost by 2035.
Why was AfCTFA conceived in the first place? It was proposed as a leveraging opportunity, to bring the success of the fast-growing markets of countries like Egypt, Ethiopia, Kenya, South Africa, Botswana, Nigeria, Rwanda, Benin, and Morocco to the whole continent.
Thanks to historically rigid trade borders between nations, these countries’ individual explosions in GDP have occurred largely because of external trade with foreign countries.
Their success has not benefited the pan-African landscape. AfCTFA plans to remedy this gap by encouraging trade within African nations, so that the continent can reap the financial benefits of its strongest players as well as invite smaller players to a bigger stage.
AfCTFA, on the ground, will transform customs clearance procedures, reduce cumbersome border restrictions, and smoothen administrative processes, so that Africans can travel more easily between nations.
With these barriers to entry leveled, small- and medium-sized businesses can literally explore new horizons, beyond their own homes, to bring in more revenue. Since these businesses are responsible for 80% of African employment and 50% of its GDP, freedom of movement will give the whole continent opportunities to boost its economic prowess — within its own borders.
