ADVANTAGES AND DISADVANTAGES OF THE AFRICAN CONTINENTAL FREE TRADE
AREA (AfCFTA)
AfCFTA was founded in 2018 and has been effective since the 30th of May 2019. It is the
largest free trade area by number of countries. Its goal is to boost intra-African trade by
reducing tariffs and integrating markets.
IMPORTANT → The commencement of trading under the AfCFTA was in January 1, 2021.
Part of a long-term development strategy by the AU.
● 55 AU member states signed the AfCFTA agreement as of January 2025.
● Continental market with a population of about 1.3 billion people and a combined GDP
of US$3.4 trillion.
Purpose:
- Eliminate trade barriers
- Boost intra-Africa trade
- Advance trade in value-added production across all service sectors of the African
Economy.
- Foster industrialisation, jobs creation and investment
- Enhancing global competitiveness
Advantages:
Development:
- 30 million people will potentially be lifted out of extreme poverty.
- A 7% gain in income is predicted in Africa by 2035 thanks to the creation of this FTA
- Estimate: $450b
Trade creation:
https://www.visaopenness.org/visa-openness-in-africa-2024-findings-2/the-african-continenta
l-free-trade-area/#:~:text=A%20World%20Bank%20study%20on,African%20made%20good
s%20and%20services.
- Total African exports are predicted to increase by almost 29% by 2035 according to a
World Bank study on the economic impacts of the AfCTA.
- Due to the expected increases in intra-African trade of African made goods and
services.
- When the AfCFTA came into effect, it significantly lowered or eliminated tariffs
between African countries. → For example, Kenya and Ghana significantly lowered
tariffs they had imposed between each other.
- Kenya’s agricultural exports to Ghana have increased due to reduced trade barriers.
- Factors of production can now move more freely and at lower costs, benefiting
producers in Kenya and consumers in Ghana.
AREA (AfCFTA)
AfCFTA was founded in 2018 and has been effective since the 30th of May 2019. It is the
largest free trade area by number of countries. Its goal is to boost intra-African trade by
reducing tariffs and integrating markets.
IMPORTANT → The commencement of trading under the AfCFTA was in January 1, 2021.
Part of a long-term development strategy by the AU.
● 55 AU member states signed the AfCFTA agreement as of January 2025.
● Continental market with a population of about 1.3 billion people and a combined GDP
of US$3.4 trillion.
Purpose:
- Eliminate trade barriers
- Boost intra-Africa trade
- Advance trade in value-added production across all service sectors of the African
Economy.
- Foster industrialisation, jobs creation and investment
- Enhancing global competitiveness
Advantages:
Development:
- 30 million people will potentially be lifted out of extreme poverty.
- A 7% gain in income is predicted in Africa by 2035 thanks to the creation of this FTA
- Estimate: $450b
Trade creation:
https://www.visaopenness.org/visa-openness-in-africa-2024-findings-2/the-african-continenta
l-free-trade-area/#:~:text=A%20World%20Bank%20study%20on,African%20made%20good
s%20and%20services.
- Total African exports are predicted to increase by almost 29% by 2035 according to a
World Bank study on the economic impacts of the AfCTA.
- Due to the expected increases in intra-African trade of African made goods and
services.
- When the AfCFTA came into effect, it significantly lowered or eliminated tariffs
between African countries. → For example, Kenya and Ghana significantly lowered
tariffs they had imposed between each other.
- Kenya’s agricultural exports to Ghana have increased due to reduced trade barriers.
- Factors of production can now move more freely and at lower costs, benefiting
producers in Kenya and consumers in Ghana.
