African Free Trade Area agreement poised to revolutionise the continent’s trade
African nations seem poised to create a prosperous and efficient trading network as they push ahead with the ambitious and far-reaching CFTA project.
The African continent is one of huge untapped potential. Despite its rich supply of natural resources and its large, youthful population, it continues to lag behind most of the world in terms of economic development. The combined GDP of Africa’s 50-plus countries, based on purchasing power parity, is equal to roughly a third of the US’.
Recently, however, one particular challenge has received increased attention: trade. Back in March, at an African Union summit held in Rwanda, a major breakthrough was made that could revolutionise the continent’s economy. During the session, 44 countries signed up to a continent-wide free trade agreement that, if ratified, will create the largest single market in the world.
The African Continental Free Trade Area (CFTA) hopes to modernise a trading landscape that remains hampered by high tariffs, outdated (or non-existent) infrastructure and regional fragmentation. If it is successful, it will become the largest free trade zone in the world and could play a leading role in lifting millions out of poverty. Progress, however, will be hard-won. The first challenge is convincing the 11 national governments that refused to sign the CFTA to change their minds – including two of Africa’s largest economies: Nigeria and South Africa.