African Continental Free Trade Area

A Catalyst for African Prosperity and a New Horizon for India and the Global South

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In an era marked by geopolitical uncertainty, supply chain disruptions, and inflationary shocks, the African Continental Free Trade Area (AfCFTA) stands as a beacon of hope and a strategic pivot for regional transformation.

Officially launched on January 1, 2021, AfCFTA is the world's largest free trade area by the number of participating countries, encompassing 54 of Africa's 55 nations, with a collective GDP of $3.4 trillion and a market of 1.3 billion people. Although the agreement was signed in March 2018 and entered into force on May 30, 2019, actual trade under AfCFTA commenced in 2021 after pandemic-induced delays.

This landmark initiative is more than a trade agreement—it represents Africa's most ambitious effort yet to restructure its economies, reduce dependency on external markets, and foster intra-continental integration. For India and the broader Global South, AfCFTA opens up unprecedented opportunities for cooperation, investment, and sustainable development.

Strategic Vision: A Unified African Market

AfCFTA aims to eliminate 90% of tariffs, reduce non-tariff barriers, harmonize trade regulations, and promote free movement of goods, services, capital, and labor across the continent. Its specific goals include:

• Expanding intra-African trade across all regions.

• Boosting industrial development and structural transformation.

• Promoting investment and innovation.

• Enhancing competitiveness through regulatory alignment and economic cooperation.

Despite Africa’s rich resource base, intra-African trade accounted for just 18% of total exports in 2020, significantly lower than intra-regional trade in Asia (58%) or Europe (68%). With AfCFTA, this figure is projected to rise to 52.3% by 2050, contributing $29 trillion to the African economy and potentially driving 7% annual GDP growth.

Tackling Poverty and Building Resilience