AfCFTA's impact on trade and growth
The AfCFTA is fostering economic integration across Africa, boosting trade and generating significant revenue, despite challenges like high tariffs and low intra-continental trade levels.
The Guided Trade Initiative, involving countries like Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia, has seen nearly 100 products approved for trade.
Notably, Kenya and Rwanda have successfully shipped batteries and coffee to Ghana, marking the first shipments under the Free Trade Agreement. This development highlights the importance of the Rules of Origin certificate, which certifies that products are manufactured in Africa using African-sourced materials.
Bongani Bingwa is joined by Crystal Orderson, discussing AfCFTA's plan for full implementation of launching true African single market.
South Africa's entry into the exporters' club is another encouraging sign, with the country exporting refrigerators, home appliances, and mining equipment to neighbouring countries.
Côte d’Ivoire, a major player within the Economic Community of West African States (ECOWAS), exemplifies the potential for economic growth fostered by strategic trade agreements and international support. With a 6.6% growth rate, the highest on the continent, according to the African Development Bank, Côte d’Ivoire's collaboration with the World Bank has paved the way for guaranteed short-term loan facilities, crucial for funding developmental initiatives.
Despite the evident progress, challenges remain.
As noted, "Africa doesn’t trade with one another in part because of that 6.1% that you pay more for goods imported from within Africa," highlighting historical barriers to intra-continental trade. However, efforts to eliminate tariffs on 90% of products showcase a strong commitment to overcoming these obstacles. Another poignant observation is that "African trade between one another was so low, we’re talking about 14%," emphasizing the significant room for growth within the continent's trade dynamics.
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The AfCFTA is undoubtedly a game-changer for Africa. The progress in various sectors and the successful implementation of pilot programs reflect a promising future for intra-African trade.
While challenges persist, the ongoing efforts to reduce tariffs and foster economic integration demonstrate a steadfast commitment to realising the continent's vast economic potential. The AfCFTA remains a beacon of hope and a catalyst for transformative growth.
Africa Focus, presented by Crystal Orderson, is brought to you by RMB. To find out more about RMB’s focus on Africa’s Investment opportunities, visit the official RMB website.