Webinar on the African continental free trade area

On Thursday 27 May 2021, in commemoration of Africa Day, the CACS hosted a zoom webinar on:

The African Continental Free Trade Area (AfCFTA):
A Panacea for Africa’s Economic Problems?

The speakers were:

• Prof Khabele Matlosa, Visiting Professor at the Wits School of Governance and a former Director of the Department of Political Affairs at the African Union Commission in Addis Ababa, Ethiopia.
• Dr Michael Pasara, Research Fellow of North West University and a member of the Pan-African Scientific Research Council.
• Dr Michael Odijie, Research Associate at the University College London.

The webinar was chaired by Mmabatho Mongae, PhD candidate and lecturer in International Relations at Wits University.

Concept note

The African Continental Free Trade Area (AfCFTA) was established in 2018 and came into force on 1 January 2021. The AfCFTA represents a milestone in Africa’s journey towards continental economic and political integration. The new trade regime has been tipped by as a potential catalyst for the continent’s economic growth and poverty alleviation.

The AfCFTA represents an ambitious plan which seeks to create a single, liberalized market for goods, services, and capital in a 55-nation bloc of 1.3 billion people with a combined Gross Domestic Product (GDP) of US$2.5 trillion. Through the gradual elimination of tariffs and non-tariff barriers to trade, AfCFTA endeavours to create a borderless continent with free-flowing trade and the seamless movement of people and capital.

The potential economic benefits are astounding. The World Bank estimates that the new trade regime could unlock growth in income of up to US$450 billion while lifting 30 million people out of poverty by 2035. Moreover, the free trade area, the largest in the world, would place Africa on a sound footing in the global economy through efficiency gains, the emergence of new value chains and industrial diversification.

It is expected to boost intra-African trade which currently stands at 15 percent compared to 60 percent in Asia and 68 percent in Europe. This means that more value will be created in Africa, generating millions of jobs for the continent’s youthful population.

This webinar probed the promise and potential of the AfCFTA as a panacea for Africa’s developmental problems, with a view to promoting a better understanding and appreciation of the importance of the trade regime. While the AfCFTA has become a symbol of Pan-Africanism, it is important to realize that it will be successful only to the extent that its implementation is informed by pragmatism rather than ideological dogma. Hence this dialogue seeks to shine a light on the complex legal, political, geographical, regulatory, and economic details that the implementation of the AfCFTA will have to contend with. If its implementation is underpinned by a comprehensive and holistic accounting of the wider environment in which it will operate, the AfCFTA’s prospects of success will be even greater.