Africa is still heavily reliant on commodity and agricultural exports while importing capital goods or food products predominantly from outside the continent.
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What you need to know about African Continental Free Trade Area
Although growth in Africa is forecasted at an average of 3.6 percent for 2019–20, with the world's fastest-growing economies being on the continent, there is still much to be done.
African Continental Free Trade Area
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With a global trade share of less than 3 percent, export diversification has yet to be achieved, as many African countries still rely on rents from extractive exports, whilst falling behind on industrialisation efforts.
Accelerating intra-African trade and boosting Africa's trading position in the global market by strengthening Africa's common voice and policy space in global trade negotiations.
Against this backdrop, intra-African trade remains below its potential, accounting for about 17 percent of the total African trade volume in 2017.
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In contrast, North American intracontinental trade accounts for 51 per cent of exports, 49 percent in Asia, and 22 percent in Latin America, while among West¬ern European countries this number reaches 69 percent.
Although some Regional Economic Communities (RECs) have achieved improvements in trade integration through tariff reductions, the African market remains fragmented.
Non-tariff barriers such as uncoordinated bureaucratic procedures, long waiting times at the border or lengthy and cumbersome export requirements raise trade costs on the continent.
As a result, Africa has integrated with the rest of the world faster than with itself.
The Member States of the Organisation for African Unity (OAU) agreed on a road map for the creation of a common African market.
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To accelerate the implementation of the Treaty and strengthen regional integration, the African Union (AU) Trade Ministers agreed to establish an African Continental Free Trade Area (AfCFTA).
The AfCFTA has since been a flagship programme of the AU and AfCFTA negotiations were launched in June 2015.
The AU is coordinating the ongoing free trade negotiations and the transition to implementation of the African Continental Free Trade Area (AfCFTA).
The African Continental Free Trade Framework agreement has been signed by 52 African Member States and is operationalised with the necessary 22 ratifications after only three years of free trade negotiations.
This stands for a huge diplomatic and political success given the short timeline, the ambitious liberalisation goals set, and the heterogeneity and a large number of 55 Member States negotiating the Free Trade Area.
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Nana Addo on AfCFTA
President Nana Addo Dankwa Akufo-Addo has assured the African Union (AU) and AfCFTA Secretariat of the continuous support of the government and the people of Ghana for the success of the free trade area initiative.
He has called on relevant stakeholders such as ministries, trade and investment promotion agencies, regulatory institutions, and business and development services providers, to work closely towards the common goal of ensuring that AfCFTA becomes a success.
He said: "There are good reasons why the AfCFTA must succeed. It is estimated that a single continental African market will increase intra African trade by $35 billion per year by harnessing the purchasing power of 1.2 billion Africans; it will help transform the huge resource endowments in African countries through value addition; it will increase export revenue earnings in Africa; it will promote regional value chains; and it will create massive job opportunities for the youth of Africa."
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