This archive report was first published on 3 July 2019.
On 30th May 2019, the African Continental Free Trade Area (AfCFTA) came into effect, marking a significant step towards establishing a single market for goods and services across the African continent.
While 52 nations have signed the agreement, only 22 have given their formal consent to the Free Trade Area. The agreement aims to boost intra-African trade, which currently stands at a mere 20% compared to regional blocs like the European Union (68%), North America Free Trade Area (50%), and Association of Southeast Asian Nations (59%).
According to a report by the Economic Commission for Africa, published on 2019-07-03, businesses need to be fully sensitized on the potential of AfCFTA to establish new trade linkages or push their governments to negotiate for these opportunities.
The private sector plays a crucial role in the success of AfCFTA. African businesses, which mainly focus on European and Asian markets, will need to shift their focus and create new trade links within the continent. To achieve this, the private sector must partner with the government in creating the necessary infrastructure, such as road networks, railway links, and electricity lines, needed for intra-African trade.
Businesses can also contribute to the success of AfCFTA by providing trade finance, information, and logistics services. Furthermore, they can be involved in the creation of rules and guidelines that will be used under the single market.
The single market agreement is expected to create jobs for the rapidly growing African population and boost economic expansion in the continent.
