African continent creates own WTO

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The African free trade zone aims to create a single market for goods and services in Africa. By 2030, the size of the market should be 1.7 billion people, the volume of consumer and business expenses will be $ 6.7 billion if by that time all African countries join the free trade zone; 10 countries, including Nigeria, have not yet signed an agreement.

The goal is to create a single continental market for goods and services with the possibility of free movement of entrepreneurs and investments.

This agreement can greatly help the countries of the continent. The trade deal should lead to a qualitative cycle of development of intra-African trade, which in turn will contribute to a structural transformation of the economy – the transition from low productivity and labor-intensive activities to higher productivity and intensive production processes. This in turn will create more well-paid jobs and help to cope with poverty.

But signing the agreement is just the beginning – the 22 countries must ratify it before it comes into force. Their national legislatures should formally approve and authorize the structure, demonstrating full commitment to its implementation. President of Nigeria Isuf Mahamadu seeks to complete the ratification process by January 2019.
Some studies have shown that when creating a pan-African market, intra-African trade can grow by about 52% by 2022.

Improving market access will create economies of scale. Combined with relevant industrial policies, this contributes to the diversification of the industrial sector and the growth of value added in manufacturing.

Industrial growth, and with it more jobs, is what Africa badly needs. Industry provides from one quarter to one-third of the total number of jobs in other regions of the world. And young people in Africa are twice as likely to become unemployed as adults. This is an extremely critical situation, given that more than 70% of the population of sub-Saharan Africa are people under the age of 30 years. In addition, 70% of youth in Africa live on less than $ 2 a day.

It is assumed that the continental free trade zone will create significant opportunities for industrialization, diversification of the economy and creation of highly skilled jobs in Africa.

A single continental market will provide an opportunity to develop production and intra-African trade through value-added products, moving from commodity economies and exports to diversifying the economy.

But in order to increase the influence of the trade agreement, a sound industrial policy is necessary. It should focus on productivity, competition, diversification. In other words, governments should create favorable conditions for increasing productivity to international competitiveness standards. The goal is to make products produced in African countries competitive on the continent and abroad.

Source Vesti Finance
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