Africa is now the largest free trade area
Updated: Sep 28, 2019
The African Continental Free Trade Agreement is officially coming into force. Now, according to a recent Brookings Africa Growth Initiative policy brief, under a successfully implemented AfCFTA, Africa will have a combined consumer and business spending of $6.7 trillion in 2030.
Indeed, Africa is home to the world’s largest free trade area since the establishment of the World Trade Organization, with Majority of the countries on the continent joining now with Nigeria having signed.
This much-needed agreement and new free trade area are important achievements for the region’s economic development. Figure 2 puts into perspective the current gap between Africa’s intra-regional trade compared to other regions. In this light, the AfCFTA is critical because it could boost intra-Africa trade by 15 to 25 percent by 2040. This increased market access to other African countries has positive spillovers too, including improving the competitiveness of industries and enterprises, increasing opportunities for economies of scale improvements, and boosting the efficacy of resource allocation.