Case for the African Continental Free Trade Area (AfCFTA)

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I dared to dream about what it would be like living in Africa when, rather than if, the African Continental Free Trade Area (AfCFTA) takes shape as one of the mouth-watering topics discussed during the ACCA Africa Members Conference held in Mombasa, Kenya.

Imagine an Africa where:

– You don’t require a visa to enter any of the other countries for business or leisure

– Your goods won’t have to suffer the often-hefty tariffs on entering another jurisdiction

– Work permits take the backstage as long as one was a child of the African land

– Countries are looking to cooperate for mutual benefit rather than compete

From review of the action plan for boosting of intra-African trade launched by the African Union in 2024, it highlights that African countries do not trade much with each another and as such have not been able to fully harness the synergies and complementarities of their economies to take full advantage of the economies of scale and other benefits (such as income and employment generation) that greater market integration would have provided.

There are several recorded instances where products and services could have been sourced competitively from other African countries but were procured from outside the continent.

For the benefits of the AfCFTA to be activated, a few of the areas of focus include:

– Organisations should be looking to build regional value chains with a multi-jurisdictional mindset depending on where they anticipate creating new partnerships depending on the need for their offering to increase production of goods across the continent.

– Countries should be looking to develop continental ready policies which implies that the focus should always be on what would facilitate collaboration beyond their borders.

– Performance targets should be set to be met by each of the 55 member states for deliberate steps to be taken in operationalisation of the AfCFTA’s core objectives.

– Developing and strengthening of African financial institutions and mechanisms that would enable access to structured finance by the member states.

– Exploration of multi-jurisdictional infrastructural projects that facilitate movement of goods and people across wider geographies.

It surely will be quite a spectacle when the yields of the AfCFTA take shape and hopefully, it will be in our lifetime so that we can look back at a good thing that we all contributed towards building.

Written by

Edgar Mukasa

Edgar is an Associate Director in KPMG Uganda with over 13 years experience working as a tax advisor in KPMG.

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