The African Continental Free Trade Area (AFCFTA) will create the largest single market in the world. The AFCFTA agreement will be the largest trade agreement in history since the creation of the World Trade Organization. The agreement gives Africa a real chance to become the next China.
The agreement will boost intra-African trade by making Africa a single market of 1.2 billion people and a cumulative GDP over $3.4 trillion. The UN Economic Commission for Africa (UNECA) estimates that the implementation of the agreement could increase intra-African trade by 52% by 2022 (compared with trade levels in 2010) and double the share of intra-African trade (currently around 13% of African exports), by the start of the next decade.
The Objectives of the Continental Free Trade Area include:
The Establishment of a single continental market for goods and services, with free movement of business professionals and investments, accelerating the establishment of the Continental Customs Union and the African customs union.
The Expansion of intra African trade through better harmonization and coordination of trade liberalization and facilitation across Regional Economic Communities (RECs) and across Africa.
The Resolution of the challenges of multiple and overlapping memberships and the expedition of integration processes.
The Enhancement of the competitiveness at the industry and enterprise level by the exploitation of opportunities for scale production, continental market access and better reallocation of resources.
As detailed in a research paper published by the United Nations Conference on Trade and Development (UNCTAD), the AFCFTA offers many opportunities for sustainable development and economic growth in the African economies.
Trade finance in Africa is a very important issue. Access to trade finance will be very important for organizations to take advantage of the many opportunities that will be thrown up by the AFCFTA. Africa has abundant natural resources, but it must unlock its resources and turn them into wealth by industralising and adding value to its natural resources. The emergence of the AFCFTA will help with this process.