How is it hoped that the African Continental Free Trade Area will increase economic activity and efficiency
It is hoped that the African Continental Free Trade Area (AfCFTA) will increase economic activity and efficiency in several ways:
1. Increased market access: By eliminating tariffs and lowering trade barriers among member countries, the AfCFTA will create a larger and more integrated market for goods and services. This will enable businesses to reach more customers and expand their operations, leading to increased economic activity.
2. Boosting intra-African trade: Currently, intra-African trade accounts for only around 15% of total African trade, compared to much higher levels in other regions such as Europe and Asia. The AfCFTA aims to significantly increase intra-African trade by removing obstacles and promoting closer economic cooperation among member countries.
3. Encouraging investment: A more integrated and prosperous African market will attract greater foreign investment, as companies seek to take advantage of the region's growing consumer base and business opportunities. This influx of investment will stimulate economic growth and create new jobs across the continent.
4. Improving efficiency: The AfCFTA will promote the adoption of common standards, procedures, and regulations among member countries, reducing the costs and complexities of doing business across borders. This harmonization will lead to greater efficiency in supply chains, distribution networks, and production processes, benefiting businesses and consumers alike.
Overall, the AfCFTA is expected to drive economic growth, create employment opportunities, and foster sustainable development in Africa, making the continent more competitive on the global stage.