The African Continental Free Trade Agreement (AfCFTA) will create the largest free trade area (since the formation of the World Trade Organization), in the world as measured by the number of participating countries. The pact connects 1.3 billion people in 55 countries on the African continent, with a combined gross domestic product (GDP) valued at $ 3.4 trillion.
It has the potential to lift 30 million people out of extreme poverty, but realizing its full potential will depend on putting in place significant policy reforms and trade facilitation measures. This will make African countries more competitive. Successful implementation will be essential, including careful monitoring of impacts on all workers – women and men, skilled and unskilled – in all countries and sectors, ensuring the full benefit of the agreement.
The AfCFTA can increase Africa’s revenues by $ 450 billion by 2035 (a 7% gain), while adding $ 76 billion to the rest of the world. Looking at the man in the street, it created the possibility of Ilift 30 million Africans out of extreme poverty and increase the incomes of nearly 68 million others who live on less than $ 5.50 a day.
Under the AfCFTA, extreme poverty would decrease across the African continent, with the most significant improvements occurring in countries where poverty rates are currently high:
- West Africa is said to experience the largest decline in the number of people living in extreme poverty – a drop of 12 million (more than a third of the total for Africa as a whole).
- Central Africa would experience a drop of 9.3 million.
- East Africa would experience a decline of 4.8 million.
- Southern Africa would experience a decline of 3.9 million.
- Countries with the highest initial poverty rates would experience the largest declines in poverty rates.
- In Guinea-Bissau, the rate would drop from 37.9% to 27.7%
- In Mali, the rate would drop from 14.4% to 6.8%.
- In Togo, it would drop from 24.1% to 16.9%
Full implementation of the AfCFTA will result in reduced red tape and simplified customs procedures. According to the Economic Commission for Africa (ECA), AFCFTA has the potential to boost intra-African trade by 52.3% by eliminating import duties, it will generate $ 292 billion of the $ 450 billion potential income gains.
As the global economy is in turmoil due to the COVID-19 pandemic, the creation of the vast regional AfCFTA market will allow African countries to diversify their exports, accelerate their growth and attract direct investment. foreigners.
The Gauteng Growth and Development Agency (GGDA) plays an active role in AfCFTA. It develops and implements the AFCFTA Gauteng Roadmap which will help Gauteng companies increase their trade and expand their operations to the rest of the continent.
During a recent webinar on Opening Africa’s Opportunities through AfCFTA, Mosa Tshabalala, Managing Director of the GGDA Group, said: âOver the past six years, the Gauteng region has exported goods and services. services to the African region worth six trillion rand. “
âThe GGDA identifies and facilitates trade between South African and African countries. Even small countries are welcome. The Agency seeks opportunities to build on each other’s common sectors and needs. A good example of this is the automotive sector in Ghana which works with Tshwane Automotive Special Economic Zones, âTshabalala added.
Another example is the expansion of the cocoa industry in Ghana. It has created 800,000 jobs for farmers in this country and represents 21% of the cocoa market share in West Africa. It exports 10% of its chocolate to Gauteng, and that is expected to increase. GGDA facilitated collaboration between Ghanaian cocoa farmers and South African companies, which were at the end of the processing chain. The finished product was then sold by the South African market to the rest of the world.
The GGDA will continue to play an active role in the implementation of the regional approach which focuses on investor-friendly countries and which will facilitate access to neighboring countries which are part of the respective regional blocs.
GGDA will identify infrastructure opportunities between African countries and companies in Gauteng Province, strengthen the role played by these companies and train them to be export ready.