African nations have timelessly faced far fetching economic upheavals. However, future economic shocks can be intercepted by enforcing laid out measures. Initially, encouraging free movement of goods and services across the border of its member states. Also, an increase in export of products within the continent. This will give rise in the general economic welfare of the nations.
With the signing of the AfCFTA we will see more African corporates emerging as they will be able to take on an expansion strategy that other global companies would be reluctant to take based on them not understanding the different African cultures. I see this opportunity as being a great benefit to more African businesses who are SMEs, as they are able to position themselves as part of the supply chain of a large African Corporate, and thus have the ability to reach a larger market beyond borders while only dealing with one partner. For example, Tusky’s, which is a Kenyan brand that is a supermarket in the retail trade industry, has continued to expand from the Kenyan market to the East African market. Should Tusky’s ever plan to expand continentally, then a SME business that supplies Tusky’s will be able to have a presence in other African countries by partnering with such a continental wide partner.
Africa’s share of the global trade has equally been dismal as fragmented markets and underdeveloped key industries including manufacturing and agro-processing reduce Africa to a net exporter of raw materials. The creation of an aggregate economy is therefore set to be a magnet for large scale and sustainable investments. The African trade bloc will also act as a buffer to global shocks with the consolidated local market offering an alternative in the event of global volatility or a dip in demand.
Well effected, an efficient and effective AfCFTA will boost Africa’s general income. By bringing together 1.2bn people, it will be responsible for rise in continental GDP of 3trn since WT. African nations shall experience home-grown investments through industrial developments. Domestic economic expansion will be as a result due to growth of real gross domestic product (GDP) Ultimately, steady decline in poverty will be to top most general advantage.
Among Africa’s serious trading obstacles is border procedures. Streamlining red-taping will encourage small businesses to explore more cross- border opportunities.