Is AFCFTA Succeeding in Africa?

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To create the world’s largest single market, the AfCFTA aims to boost intra-African trade, foster economic integration, and spur sustainable development. As we approach the fifth year since its implementation, it is important to assess whether the AfCFTA has made progress in Africa since its inception or not.


With Africa having the world’s youngest population, the AfCFTA, aligned with “Agenda 2063,” aims to boost intra-African trade, increase productivity, create jobs, and provide balanced opportunities. Projected benefits include a $450 billion income increase by 2035 and a $29 trillion African economy by 2050.


Currently, gender biases in trade persist, disadvantaging women, and youth face hurdles in accessing formal employment. Inclusivity is essential to avoid the AfCFTA becoming a source of poverty and inequality. The AfCFTA Secretariat is taking steps to enhance customs unions, but barriers still hinder women and youth in business.


Access to finance for women- and youth-led enterprises is limited, necessitating improved financial literacy and innovative financing solutions. The government’s efforts to remove barriers to digital financial literacy are commendable, aligning with Agenda 2063’s vision for a prosperous Africa driven by its people.


While the multilateral trading regime faces challenges,it aims to create a continental market of 1.3 billion people with a combined GDP of $3.4 trillion. The agreement is expected to boost intra-African trade, increase income, and lift millions out of poverty. However, challenges such as a funding gap for infrastructure persist.


The forum emphasised the need for $130–170 billion annually to improve infrastructure, addressing issues like limited access to electricity and remote living. AUDA-NEPAD’s Dakar Financing Summit garnered $65 billion in investment for infrastructure projects, crucial for reducing trade barriers and promoting economic growth.


Manufacturing in Africa, which contributes only 10% to GDP, has the potential to increase output to $1.7 trillion by 2030, creating millions of jobs. AUDA-NEPAD is working on multi-sectoral industries, including agro-processing and green technology, to foster economic growth.

Trade Facilitation and Tariff Reductions:


One of the primary objectives of the AfCFTA is to eliminate tariffs on 90% of goods traded within the continent. By doing so, it seeks to create a conducive environment for businesses to thrive and enhance economic cooperation among African nations. Initial reports suggest progress in this area, with several countries implementing tariff reductions and simplifying customs procedures. However, challenges remain, including the need for more countries to ratify and fully implement these measures.


Intra-African Trade Growth:


The success of the AfCFTA is closely tied to the growth of intra-African trade. Historically, Africa has had relatively low levels of intra-continental commerce. The AfCFTA, by dismantling trade barriers, aims to boost trade between African nations. Early indications suggest a positive trend, with some countries experiencing an increase in intra-African trade. However, the full impact may take time to materialise as businesses and governments adapt to the new trade dynamics.


Challenges and bottlenecks:


Despite its potential, the AfCFTA faces several challenges. Infrastructure deficiencies, bureaucratic hurdles, and non-tariff barriers continue to impede the smooth flow of goods and services. Addressing these issues requires coordinated efforts from member states to invest in infrastructure, streamline customs procedures, and harmonise regulations. The success of the AfCFTA hinges on how effectively these challenges are tackled.


Private Sector Engagement:


The active involvement of the private sector is crucial for the success of the AfCFTA. Businesses play a central role in driving economic growth and job creation. Governments need to create an enabling environment that encourages private sector participation, innovation, and investment. The AfCFTA’s success will depend on the ability of member states to engage with and empower their business communities.


Capacity Building and Institutional Strengthening:


For the AfCFTA to succeed, member states must enhance their institutional capacities to implement and enforce trade agreements effectively. This includes building robust regulatory frameworks, investing in skills development, and fostering a culture of compliance. Strong institutions are vital for ensuring that the benefits of the AfCFTA are realised at both the national and continental levels.


The AfCFTA holds immense potential for leveraging the capabilities of women and youth, offering a unique chance for the African Union (AU) to prioritise empowerment interventions. Timely AU efforts to implement AfCFTA policies can be a transformative force if driven by women and youth, who are vital assets for the continent’s progress.


The AfCFTA represents a historic opportunity for Africa to reshape its economic landscape and foster greater collaboration among nations. While progress has been made in certain areas, challenges persist, and the full impact of the agreement may take time to materialize. Africa needs to address infrastructure deficiencies, bureaucratic hurdles, and other barriers that hinder the seamless operation of the free trade area. The success of the AfCFTA ultimately rests on the commitment of African nations to work collaboratively, invest in their institutions, and create an environment that promotes sustainable economic growth.


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