Opening doors for intra-Africa trade through the implementation of the single market agreement will significantly boost the continent's GDP, African Union Commission (AUC) official said.
AUC deputy chairman Thomas Kwesi Quartey said in Addis Ababa on Monday that African Continental Free Trade Area (AfCFTA) was critical in boosting the GDP.
“Whenever the intra-Africa trade rises by 2 per cent, the GDP grows by 10 per cent,” said Mr Quartey.
“If you look at the forecast from the intra-Africa trade simulations, CFTA will increase the consumer spending to about $1.4 trillion in 2020. Similarly, it will increase intra-African trade by as much as $35 billion per year, or 52 per cent above the baseline by 2022,” he said, in his remarks at the opening of the 2018 conference of ministers of Finance, Economic Development and Planning.
The AUC official noted that such an economic performance would create jobs for the youth and help stem the illegal migration of Africans in search of opportunities in Europe.
Ethiopia Prime Minister Abiy Ahmed indicated that his country would follow the footsteps of Ghana and Kenya, which recently ratified the AfCFTA and submitted the documents to AU.
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“Trade is not an end by itself. It is the means to advance the wellbeing of Africans …Once it is implemented, our opportunity to attract investment will only increase. Ethiopia is fully aware of the benefits of free trade in Africa,” the premier said.
Forty-four out of the 55 AU member states have signed the protocol to establish the AfCFTA, while 11 others, including Nigeria and South Africa, were expected to join one of the biggest free markets in the world. Africa is home to 1.2 billion people, with over $2.5 trillion GDP.
Organised by the United Nations Economic Commission for Africa, the Ethiopia conference of the ministers is discussing the recommendations of the experts who have discussed the challenges and opportunities of implementing AfCFTA.
It is believed that AfCFTA would benefit more the African countries with better economic conditions with diversified products.
Identifying their comparative advantage and investing on developing those industries is often mentioned as one of the focus areas for small economies to benefit from the AfCFTA.