IMPLEMENTING AFRICAN CONTINENTAL FREE TRADE AREA (AfCFTA) AGREEMENT AS AN ECONOMIC STIMULUS

Background

The coming into force of African Continental Free Trade Area (AfCFTA) marked a turning point for Africa’s economic development. The trade zone, in the making for nearly half a century is the largest in the WTO’s 25-year history, is a 1.3 billion people market, majority of whom are young. 

The combined spending and investment power of the zone at the time of AfCFTA’s ratification was estimated to be $3.5-4 trillion, creating an important economic bloc, coming on the heels of on an African economy that was set to grow at about 3.4 % in 2019 and projected to increase to 3.9% in 2020.

AfCFTA is meant to eliminate 90% of tariffs and create a single market with free movement of goods and services. This is expected to significantly boost intra-African trade and ultimately induce a stronger economic collaboration between member countries. Intracontinental trade was expected to increase by 52% as a result. The AfCFTA secretariat hoped to conclude enough technical work to enable the commencement of trade by July 1, 2020. 

And then COVID-19 pandemic hit, and the global economy came to the gridding halt. Global markets account for 88% of Africa’s exports, mostly in oil, mineral resources and agricultural commodities. Public-finance-anchored economic stimulus packages are the dominant engines of rebooting a devastated global economy across Africa’s partners from Europe to China. 

So, where does AfCFTA go from here?

Objective of Session