by Tumi Frazier, founder of Tumi Frazier International
Imagine creating one African market; a single continental market for goods and services with free movement of businesses, trading partners and investments that enable us to trade with one another in the continent. Imagine prioritizing the production of value-added goods made in Africa, by Africans for Africans and the rest of the world.
44 African countries recently signed an agreement establishing the African Continental Free Trade Area (AfCFTA). The UN Economic Commission for Africa estimates that the AfCFTA has a potential to boost intra-African trade by 53.2 %. The goal is to create a trade policy that all African countries in the free trade area agree upon.
Essentially, the African countries that have signed the free trade agreement will develop rules of engagement pertaining to various factors such as customs procedures each country will follow, tariffs to invoke if any, trade dispute resolutions amongst the participating countries, how goods will be transported for trade including how intellectual property rights will be managed. The AfCFTA will establish a single market that will spur industrialisation, integration, socio-economic development, diversification, infrastructural development and trade across the continent that consists of more than 1.2 billion people.
What does this mean to us entrepreneurs? It means we need to get ready to seize opportunities that the African Continental Free Trade Area presents. While this will without a doubt increase competition among entrepreneurs, especially producers, it will also enable us to acquire a greatly expanded market of potential customers.
So, it’s essential that you up your game; understand what your competitors do well and don’t do well; but most importantly what consumers deem valuable.
A free trade area also stands to benefit consumers as they will have increased access to less expensive goods given the reduced tariffs or the absence of tariffs. Since each African country will focus on its unique strength and produce what they are exceptionally good at, this will in turn increase efficiencies and profitability of each country. Furthermore, consumers will have access to higher quality goods from neighbouring countries.
So, the entire continent stands to benefit immensely from the establishment of the free trade area. The more goods we produce in Africa the more trade power we will gain. The ability to manufacture goods gives countries more power because they trade goods than they do services and this in turn spurs development.
Tumi Frazier is a South African entrepreneur, professional speaker, author, TV personality, consultant, and founder of Tumi Frazier International, Tumi Leadership Academy, and Tumi Foundation. Tumi is an internationally acclaimed Leadership and Change Management expert who has worked with high profile clients and organizations across Africa, United States and Europe. Tumi has authored 4 books: Courageous Stories of Inspiration; In the Midst of the Storm; Stepping Stones to Success; and Your Moment. Follow Tumi Twitter | LinkedIn
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