Intra_African trade during 2015- 2017 was 15.2% while Europe was 67% , Asia is 61.% , America was 47% and Oceania 7% as stated in the United Nations Conference on Trade and Development. This was a clear sign that Africa lacked togetherness in terms of money circulation and industrialization. In this article titled “Unity, a Key Driver For African Development,” we assess impact and developments thus far of the African continental free trade area.
In 2015 the African union established the 2063 Agenda that will bring together African nations to work together and develop the continent. The agenda 2063 is an African blueprint that aims to transform the African Economy as the Guide exploring Africa report states.
It is the continent’s strategic framework that aims to deliver on its goal for inclusive and sustainable development and is a concrete manifestation of the pan-African drive for unity, self-determination, freedom, progress and collective prosperity pursued under Pan-Africanism and African Renaissance. To reach this target Africa union set strategies will accelerate the digital transformation in the agenda 2063.
Strategies to the Agenda 2063 :
- Establishment of the African Continental Free Trade Area (AfCFTA)
- Integrated high speed train network
- Formation of an African commodities strategy
- The African Passport and Free Movement of People
- Silencing The guns by 2020
- Implementation of the Grand Inga Dam Project
- Establishment of a single African Air-transport Market (saatm)
- Establishment of an annual african economic forum
- Establishment of the african financial institutions
- The pan-african e-network
- Africa outer space strategy
- An African virtual and e-university
- Cyber security
- Great African museum
- Encyclopedia Africana
Establishment of the African Continental Free Trade Area (AfCFTA) :
The African continent free trade area(AfCFTA) is a project of the African Union to fulfill an agreement in the 2063 Agenda that will allow goods and services, with free movement of business persons and investments. This will work well with African passport that will allow free movement; establishment of the african financial institutions aims at accelerating integration and socio-economic development of the continent through the establishment of organizations which will play a pivotal role in the mobilization of resources and management of the African financial sector; as well as African continent free trade area(AfCFTA).
Social Impact of African Continent Trade Area(AfCFTA) :
The African continent free trade area will bring all 54 nationalities together to cover the market with 1.2 billion people stated by the UNDP report. AfCFTA will create job opportunities as well as raising wages up 11.2 percent for women and 9.8 percent for men by 2035, albeit with regional variations depending on the industries that expand the most in specific countries according to the World Bank.
Economic impact of African Continent Trade Area (AfCFTA) :
This will combine the GDP of 54 countries which will be equal 3.4 trillion USD ;this will increase the income by 7% which is equal to $450 billion by 2035 since combing the GDP will eliminate tariffs by 90% of good and reduce barriers to trade services as stated by this world bank report.
It is estimated that it will reduce the number of people living in extreme poverty from 277 million to 40 million by 2035 according to this world bank report. The AfCFTA could contribute in increasing foreign direct investment by an estimate of between 111 percent to 159 percent.
Inflows of FDI attracted by the AfCFTA would bring jobs and expertise, build local capacity, and forge connections that can help African companies join regional and global value chains as stated in this World bank report.
The African continent Free trade area will harmonize financial technology especially when it comes to accessing the market needs and making financial decisions that will benefit the whole continent in general.
The only concern will be how will AfCFTA coexists with other regional trade agreements already in place with established regulations.
How Will The AfCFTA Coexist With the other regional trade Agreements?
For a country having many regional trade agreements is not a bad thing because; this means more economic development to the country. Regional trade agreements are about preferences. They usually take a long time (several years) to negotiate, AfCFTA will have to design regulations that work and allow the coexistence of those other regulations already in place.
AfCFTA rules are designed in a way that will benefit the economy of the whole continent and all countries have equal opportunities with transparent ,clear and predictable and mutually-advantageous rules to govern Trade in Goods and Services, Competition Policy, Investment and Intellectual Property as UNCTAD stated.
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Marie Nadine Isimbi
Marie Nadine Isimbi is a conservationist/activist. On April 2nd 2022, Isimbi graduated from college with a Bachelors of Arts(Hons) in Global Challenges degree with a specification in environmental and wildlife conservation. Has work experience in the conservation sector of cumulatively 6+ months in Africa. Worked with reputable local and international organizations. Partnered with diverse people from different cultures and regions in Africa. Developed skills set educating community on the importance of conserving the natural resources for the future use and living a sustainable lifestyle especially in East Africa. She is passionate about storytelling and she believes that Storytelling influences us to do good.