The Continental Free Trade Agreement (CFTA) is a historic agreement aimed at creating a single market for goods and services across the African continent. The agreement was signed in March 2018 by 44 African countries, making it one of the largest free trade agreements in the world. The main objective of the CFTA is to boost intra-African trade and enhance economic integration across the continent.
The CFTA is expected to create a market of over 1.2 billion people with a combined GDP of over $2 trillion. The agreement seeks to eliminate tariffs on 90% of goods traded within the African continent and to phase out the remaining tariffs over a period of five to ten years. This will make it easier for businesses to trade across borders, expand their markets, and increase their competitiveness.
The CFTA is also designed to address non-tariff barriers to trade such as bureaucratic red tape, corruption, and poor infrastructure. These barriers have been major hindrances to intra-African trade, making it more difficult for businesses to expand into new markets.
The CFTA is not just about free trade. It is also about creating a framework for cooperation and integration across the African continent. The agreement seeks to create a harmonized regulatory environment, promote cross-border investment, and facilitate the movement of people, goods, and services across borders.
The CFTA has the potential to transform the African economy and lift millions of people out of poverty. However, there are also risks and challenges. Some countries may resist opening up their markets to competition from other African countries. There may also be concerns about the impact of the CFTA on small businesses and vulnerable sectors of the economy.
In conclusion, the Continental Free Trade Agreement is a bold and ambitious initiative that seeks to create a single market for goods and services across the African continent. It has the potential to boost intra-African trade, enhance economic integration, and create a framework for cooperation and development across the continent. However, the success of the CFTA will depend on strong political leadership, effective implementation, and a commitment to address the challenges and risks associated with free trade.