The African Continental Free Trade Area (AfCFTA) agreement will create the largest free trade area in the world measured by the number of countries participating. The pact connects 1.3 billion people across 55 countries with a combined gross domestic product (GDP) valued at US$3.4 trillion. It has the potential to lift 30 million people out of extreme poverty, but achieving its full potential will depend on putting in place significant policy reforms and trade facilitation measures.
The tentacles of AfCFTA is large. The agreement will lead to a drastic reduction in tariffs among member countries and take care of policy areas such as trade integration and facilitation services, as well as measures taken in regulation such as sanitary standards and technical barriers to trade. Full implementation of AfCFTA would bring a positive disruption of traditional markets and economies across the continent and bolster output in the utility service providers, production, manufacturing and natural mineral resources sectors.
As the global economy plunge in turmoil due to the COVID-19 pandemic, creation of the vast AfCFTA regional market is a major opportunity to help African countries diversify their what they export, fast track growth, and usher in FDIs.
COVID-19 has caused major disruptions to trade across the continent, especially critical goods such as medical supplies and food.
Governments are tasked to design policies to increase the preparedness of their human resources to take advantage of new opportunities, In some sectors facing job losses, governments will have to be prepared to give workers succor in the midst of uncertainties as well as policies to retrain workers.
In conclusion, in increasing regional trade, lowering cost of trade and easing border procedures, full implementation of AfiCFTA would help African countries increase their tenacity in the face of future economic ripple and help usher in the kinds of deep reforms that are necessary to enhance long-term growth and development.