Africa’s New Trade Zone: African Business

Africa offers great potential for growth with immense resources and a young population, and the African Continental Free Trade Agreement aims to increase regional trade integration, develop regional supply chains and diversify exports: “the agreement will be fully supported with well-defined rules of origin; schedules of tariff concessions in trade in goods; an online continental non-tariff barrier monitoring and elimination mechanism; and a Pan-African digital payments and settlement platform as well as an African Trade Observatory portal,” reports African Business. For 2017, intra-African trade represented 15 percent of imports and exports and that could grow to 50 percent by 2040. Increasing regional trade requires financing and accurate assessment of trade risks by African banks. South Africa could lead in boosting regional trade, increasing industrialization and value-added production while reducing dependency on export of raw resources. The trade deal, entered into force as of May 30, could reduce national political power while boosting regional economies as whole. Trade organizers must ensure that economic benefits are distributed fairly among and within all African nations to avoid Brexit-like discontent. – YaleGlobal