Browsing: Free Trade in Africa

The African Continental Free Trade Area (AfCFTA) has presented a distinctive opportunity to bolster economic growth, alleviate poverty, and decrease Africa’s reliance on volatile commodity cycles. According to a World Bank report from 2020, the AfCFTA can increase the continent’s income by 7 per cent by 2035 and elevate around 40 million individuals out of extreme poverty. This positive impact is primarily attributed to the stimulation of intraregional trade, termed the “AfCFTA trade scenario” for this analysis.…

The difficulty of transferring commodities throughout Africa is not new to the continent. It is currently a key impediment to the AfCFTA’s prospects, especially in building regional industrial supply chain clusters. Africa’s massive infrastructure deficit has hindered regional trade and economic integration for decades, notably in transportation and supply chain fragmentation.

Some parts of the continent, specifically areas surrounding East African nations, do far better in cross-border movement and trade. However, most African countries fare poorly on metrics such as cross-border clearance processes. According to the World Bank’s Logistics Performance Index, the regions also struggle with trade quality, infrastructure, inconsistent tax regimes, and consignment trace and track techniques.

Digitalisation in Africa’s logistics industry will address some of these difficulties. Furthermore, the development of digital logistics startups has aided in the facilitation of connection, which is critical to the movement of commodities within the area and across borders.…

The largest global free trade area by countries is poised to transform Africa’s economic prospects and it could not have come at a more interesting time.

For reasons I won’t get into in this article, the world has witnessed a tremendous rise in populism, protectionism and nationalism. Popular choices in key economies have shifted the status quo bringing into question well-established political and economic powerhouses. With the arrival of the pandemic, trust in governments across the world has diminished and weak leaders in developed economies have found theirselves exposed.

In my view, these elements ironically created a perfect storm for the launch of AfCFTA, the African Continental Free Trade Area. Global trade is going through deep changes either for fears of infection or due to concepts of self economic preservation in smaller developed countries. Border enforcement across the world is shifting on a daily basis and there’s a real …