African leaders have created the world’s largest free trade area since the WTO—here’s its potential
By Landry Signé, Stanford University
African leaders have just signed a framework establishing the African Continental Free Trade Area, the largest free trade agreement since the creation of the World Trade Organization.
The free trade area aims to create a single market for goods and services in Africa. By 2030 the market size is expected to include 1.7 billion people with over $6.7 trillion of cumulative consumer and business spending—that’s if all African countries have joined the free trade area by then. Ten countries, including Nigeria, have yet to sign up.
The goal is to create a single continental market for goods and services, with free movement of business persons and investments.
The agreement has the potential to deliver a great deal for countries on the continent. The hope is that the trade deal will trigger a virtuous cycle of more intra African trade, which in turn will drive the structural transformation of economies – the transition from low productivity and labour intensive activities to higher productivity and skills intensive industrial and service activities—which in turn will produce better paid jobs and make an impact on poverty.
Photo courtesy of AMISOM Public Information.