The African Continental Free Trade Area (AfCFTA) has managed to maximise itself to its complete potential, as the 54-country trade bloc met recently to critically expand its free trade zone to establish better connections and ignite the commerce activities within the continent.
Assessing the decision, this move would not only improve Africa’s overall economic condition, but also establish the continent at an international level, especially in terms of trade and commerce. Trade and commerce activities are extremely important for a country to go beyond borders and allow the global market and free forces of trade come to being, so as to allow the individual economy to thrive and become more self-reliant and self-sufficient. The AfCFTA is the world’s largest free trade zone, since the establishment of the World Trade Organisation(WTO), and thus, underlines how Africa is moving towards a common goal and direction, along with other regions of the world.
The policy would begin, as a first, by cutting tariffs for goods that are traded within the bloc, and will then further its reach to other areas, with the same idea. Intra-African trade is expected to boost at a net income by US$ 2.8 billion per annum, with this policy. Other than predicting the estimated boost, this policy is also set to create a common African market for goods and services which would, further, encourage trade within Africa just as much as it would encourage trade with other global partners.
The AfCFTA is expected to increase Intra-African trade by 33% once full tariff liberalisation would be implemented, which would further attract investments and foster employment opportunities in the region. This decision of a free trade zone under African continent has been regarded as an ‘economic game changer’ by IMF and it is predicted that it would boost global growth to an exponential level.
Of the key signatories to AfCFTA is Egypt, which also happens to be an important garment producer, and is expecting an open market for the sake of production. Egypt has also assumed the chairmanship for African Union, beginning this year, and is also one of the founding members of the Non-Aligned Movement (NAM). With Egypt’s common connection with NAM and its affiliation to AfCFTA, the Government is looking forward to allowing NAM member-countries to have a greater incentive to invest in Africa, for its betterment. The AfCFTA also allows prosperous opportunities to create a continental market that could host over a billion consumers. Not only Egypt but other countries in the African continent that would share the benefits of being members of NAM and the AfCFTA would also encourage similar investments in various areas such as industrial and technological zones and Special Economic Zones (SEZs).
NAM member countries as well as African countries, which are a part of the AfCFTA, tend to share a common idea of growth and development, in this manner. Managing individual economies and establishing a stronghold in international politics becomes an important priority and developmental goal for both. The AfCFTA along with African Union, and the support and encouragement of NAM, will be able to determine and implement important reforms when it comes to trade and commerce, but the moment of truth will come to play, alas, when Nigeria formally joins the existing trade bloc. Nigeria is an important African country, which has been severely affected by corruption and inefficiency; alignment to a magnanimous trade bloc like AfCFTA will allow the vulnerabilities of these regions to be exposed so that corrective measures can be put in place.
NAM has always been at the forefront when it comes to encouraging member-states to tackle issues related to trade and development, industrial cooperation, economic stability and so forth. The AfCFTA is, indeed, one such act of solidarity and encouragement that allows the developing countries of the world to take a stand when it comes to self-reliance and sufficiency in order to stabilise economies and establish a successful standing at international market. By allowing the stamp of ‘Made in Africa’ to come on products that would eventually be sold in markets around the world, there is an increased validity which instils confidence, and in turn, allows the countries to rely lesser on exports from the West. Considering the economic stagnation and disadvantage suffered by the African continent, ravaged by conflicts and poverty, the formation of a powerful trade block like AfCFTA sends a strong message around the world of an increasingly independent and developing economy that Africa aspired to be, all this while.