Ending Non-tariff Barriers Could Unlock Africa's Riches

- Sifiso Ntombela

Last month, South Africa became the 49th nation to sign Africa’s Continental Free Trade Agreement (CFTA), which seeks to create a single continental market. With eight African regional economic communities on the continent, integration is difficult, resulting in a low volume of intra-African trade.

The CFTA covers trade in goods and services, investment, intellectual property rights and competition policy. It moves beyond the conventional free-trade agreement, making it an instrument for fostering regional economic integration in Africa and harmonising norms and regulations related to services and trade.

The agreement is an opportunity to boost trade within the continent and attract investment for social and economic infrastructure, thus creating capacity for adding value to agriculture and mining products. Agriculture accounts for 32% of Africa’s GDP and employs 65% of the labour force.

The United Nations Conference on Trade Development (UNCTAD) argues that the CFTA has the potential to increase the continent’s annual income by US$16 billion (about R213 billion) under an ambitious policy scenario that assumes a full tariff elimination by all 55 member states of the African Union.

The agreement could increase employment by more than 30% over the next decade, with the agricultural sector among the biggest winners.