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An Analysis of Intra-trading in Africa

In a report earlier this year, the International Monetary Fund (IMF) called the AfCFTA  free-trade agreement a “game changer” if African governments are able to bring down tariffs and boost trade within the Continent. Beyond the sizable political and bureaucratic hurdles standing between governments and the implementation of the deal, there are broader challenges to African economies. Some estimate that the Continent needs to generate a million jobs a month to satisfy the demands of a booming generation of young people desperate for employment. The trick will be to ensure that this hunger for jobs does  not become a dangerous liability. Africa needs an estimated $90 billion-100 billion a year in investment in infrastructure, including a huge expansion of its power supply and better road/rail/air infrastructure. However, of course, a more integrated African market has attracted foreign businesses in what some are calling the new “scramble” for Africa. China’s ever-expanding footprint on the Continent provokes complaints of neo-colonialism, but there has also been a flurry of recent investment and engagement from India, Japan, Turkey and Brazil, as well as the major powers of the West. This, ultimately, may be a boon for Africa, or it may continue to prevent Africa from diversifying its home-grown manufacturing and services industries by flooding the market with low cost products which are difficult, if not impossible, to compete with.

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