The African Continental Free Trade Area is a powerful integration event. It paves the way to great business opportunities in which the African continent will finally stop being only a supplier of raw materials.

The economic potential of the African continent is multiplying. Last February, Casa Africa organised the Understanding African Continental Free Trade Area webinar. During this event, Carlos Lopes, the African Union’s special envoy to the EU said: “Multinationals looking for growing markets can find opportunities to establish or expand their presence in Africa.”

 It is therefore high time to press the accelerator to open up the market and position ourselves in African countries such as Ivory Coast (read Ivory Coast Post COVID-19 : possible shelter for exports?).

The African Continental Free Trade Area’s Objectives

The main objective of creating a free trade area is to stimulate trade through free movement of goods, people and capital between the signatory countries. It helps to benefit from the comparative advantages of each country and to promote economic growth for all. This is initially achieved by reducing existing taxes and barriers to goods’ import and export.

 In the same webinar, Ainhoa Marín, senior researcher at Elcano Royal Institute, points out that the African Free Trade Agreement is one of the flagship projects of the African Union (AU) ‘s Agenda 2063 for Strategic Development. It includes, among other ambitious projects: the building of transportation facilities and networks that represent Africa’s backbone, and the establishment of one future customs and monetary union.

Signed by 54 countries and ratified in a short time by 36 of them, the AfCFTA has been based in Ghana since July 2019 and is already in its “operational phase.”

The African Continental Free Trade Area’s Advantages

Senior researcher at the Elcano Royal Institute describes the AfCFTA’ launching as “a powerful event in economic integration on the African continent, which, despite the heterogeneity of its countries, holds great opportunities”. An ambitious project that constitutes the first step towards a common trade policy with the European Union and third countries, a common passport and a single currency. 

 The free trade area is being created in Africa in the hope of attracting new foreign companies and investments and promoting intra-African trade. The development of the AfCFTA will build on the 8 existing regional economic communities. One of these is the WAEMU – West African Economic and Monetary Union . It is one of the most developed and dynamic economic communities in Africa. It is also where

HOW2GO (consultancy company specialised in the promotion of international trade and business) has been working since 1995 to help you open up the markets of Ivory Coast, Burkina Faso and Senegal.

The AfCFTA offers many benefits to its member countries: 

• Reduced tariffs and taxes, regulatory harmonisation, procedures’ simplification and cooperation in customs control will facilitate increased intra-African trade.
• Reduced dependence on third countries and increased intra-African trade will promote the continent ‘s industrialisation.
• Industrial and economic development will lead to increased employment.
• The continent’s competitiveness should also be promoted through easier technology transfer between countries.
• Africa will move from being a mere exporter of raw materials to processing them locally, which will yield greater added value, a greater variety of products at more competitive prices for its people and less dependence on the outside world.
• A better distribution of wealth should promote the progress of the continent and raise the standard of living of the Africans.

In summary, AfCFTA secretary-general Mr. Wamkele Mene advocates the discontinuation of Africa’s colonial economic model (the continent is dedicated to exporting raw materials without adding value)  in favour of a new model. According to Cyril Ramaphosa, president of South Africa and current head of the AU, a new model that can change the “economic fortunes” of the continent. 

How2Go shares this hope and can help you open up markets like the Ivory Coast, one of the fastest growing African markets of the last decade. Contact us without any commitment here!

To read the first article in this series on the AfCFTA, click here and to read the third click here and final article in the series, click here. Enjoy your reading!