We need a sustainable African Continental Free Trade Area (AfCFTA)

Last week marked an important milestone for Africa, when the African Continental Free Trade Area (AfCFTA), came into effect on 30th May. AfCFTA has major implications for Africa’s development, if its is well implemented. AfCFTA could potentially create a single market for goods and services for Africa’s 1.2 billion people, with a combined GDP of $ 2 trillion. At this scale, Africa could truely be on its way to realising its potential.

One of the major challenges hampering Africa’s development is the poor intra trade on the continent, which is at a dismal 16%. This figure might just seem like a statistic, until you try to cross any African border, whether its from Tanzania to Zambia or from Nigeria to Benin, the chaos that you encounter, corrupt officials and general insecurity is just all too stark to ignore.  So the the AfCFTA is way more important than one could imagine.

From a purely economic perspective, according to UNECA (UN Economic Commission For Africa), AfCFTA could raise trade on the continent by 15% to 25%. This could truely signal Africa’s prosperity, or is it?

Much as improved intra trade on the African continent is highly desirable, the potential for it to revolutionarise the Africa has to be tappered against other barriers and negative externalities the continent faces, like climate change.

Agriculture is Africa’s main economic driver, with very few countries having diversified into other sectors like manufacturing and services. As a result, alot of the intra-trade in Africa will still be based on agricultural goods and services as the main offering of some countries. Agriculture on the hand will be highly impacted by climate change, as increase in temperature will result in reduced yields, prevalence of diseases and extreme events such as drought and flooding. Agriculture also uses a very large amount of water, which is going to be even more scarce.

Therefore for AfCFTA to be effective, it needs to promote sustainable trade on the African continent, to enable businesses effectively adapt to the impact of climate change, while ensuring that its impact on the environment are minimised. It will be extremely callous to ignore the need for sustainable trade in promoting a united Africa, as the continent will be one of the hardest hit by climate change.