Regional trade integration and African Continental Free Trade Agreement (AfCTA)

Regional trade integration and African Continental Free Trade Agreement (AfCTA)

Economic growth is the primary parameter for calculating the progress of a country or a continent. The continent of Africa has been economically deprived in comparison to the progress made by others. A major attribution to the low economic progress in the continent is the reluctant and sluggish development of regional trade integration in Africa.

It is no secret that enhancing trade integration could produce large economic gains for the continent. For smaller African countries, integration is a crucial element for a higher level of competitiveness. As the rest of the world becomes more global and competent, it is crucial for Africa to employ regional integration in order to increase its potential for growth and to play a leading role in the global market. This understanding led to the latest initiative of African Union in the form of AfCTA at Kigali, Rwanda in March 2018.

The main objective of AfCTA is to boost inter-African trade primarily by deploying a single legal regime across the continent for all trade disciplines. This will include reduced tariffs and simplified rules of origin and custom procedures. AfCTA will allow local African companies to be introduced to new markets.

A major area where African markets need an overhaul is manufacturing. It represents only 10% of total GDP in Africa and AfCTA has the potential to improve this vastly. AfCTA will also ease the process of importing raw materials from other African states. Moreover, when foreign investments will be free of restrictions, investors will rush to Africa.

AfCTA is the first continent wide African trade arrangement and in terms of number of participating countries, it will be the world’s largest free trade area since the formation of World Trade Organization. It naturally has many expectations with it. It is significant however to realize that African countries differ substantially from each other in terms pf development and strength of economies. It would thus be a challenge to implement AfCTA in a way that adopts elaborate policy-making and preferential treatment for Africa’s most at-risk economies so to reap widespread advantages for all African countries.

It is also important to understand that improvements will not come overnight. Nonetheless, the African Heads of States are resolute to put African trade on a sound footing now which is signalling a promising future.


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