How Free Trade and Technology is impacting Africa’s development
When the Africa Continental Free Trade Area is implemented this year, it will create a single market for goods and services for the first time in the continent’s history.
The agreement will cover a geographic area with a combined GDP of $3.2-trillion and a population of 1.2 billion people.
It has the potential to drastically accelerate economic growth and exceed the African Development Bank’s current estimates for GDP growth from $1.7-trillion in 2010 to more than $15-trillion by 2060.
This has the potential to shift Africa from being an aid-dependent continent to becoming an investment-dependent continent.
According to the Brookings Institute, African foreign direct investment (FDI) inflows accounted for only 2.9% of total global FDI inflows in 2017, compared to the 49.8% share for developed economies, and 10.6% for Latin America and the Caribbean.
A continental super bloc has the potential of creating an attractive value proposition for investors who are dealing with the fallout from Brexit, a US-China tariff war and a global economy that is falling short of projected growth targets.
For African governments, businesses and citizens, the prospect of the Africa Continental Free Trade Area (AfCFTA) has prompted widespread excitement and optimism, especially among some of Africa’s leading business and political figures.
From Business Week.
Rwanda’s President Paul Kagame said: “Speaking with one voice as a continent will emerge as perhaps the most important provision of all for the success of the African Continental Free Trade Agreement.”
South Africa’s President Cyril Ramaphosa publicly stated that “this is a free trade area that has never been seen in the world.
It’s going to be the largest integrated market on the African continent, which is a clear demonstration that indeed Africa is not only on the rise, but Africa is on the move.”
Read more at Business Week.