Is South Africa a threat to Africa Free Trade Area?

Bame Piet

The African Continental Free Trade Area (AfCFTA) was commemorated on Tuesday, the same day truck drivers in the continent’s second biggest economy – South Africa – blocked trucks from travelling to other countries.

The blockade, which was declared unlawful by the Pretoria High Court ended in some trucks being torched, as some South African drivers demand an end to employment of foreign drivers.

Nonetheless, the SADC Executive Secretary, Dr Stegomena Lawrence Tax, said that continental integration will greatly contribute to the realization of “our forefathers’ dream of a united, and prosperous Africa”, once fully operationalized.

In her statement on the commemoration of AfCFTA Day on July 7th, she said that the continent has 55 countries with a combined population of 1.2 billion people, with a Gross Domestic Product of USD3.4 trillion. 

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“It aims to create a single continental market for goods and services, with free movement of business persons and investments. It also aims to expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation across Regional Economic Blocs and Africa in general,” she said.

Lawrence Tax added that if implemented effectively, the AfCFTA will enhance competitiveness at the industry and enterprise level, through the facilitative cross border infrastructure, as well as, the exploitation of opportunities for scale production, continental market access, and effective allocation of resources.

“The AfCFTA is also to address fragmentation of the continent’s trading system that currently operates under exclusive blocs, which has always raised concerns over the distortions imposed by multiple and overlapping membership”.

She said that the continent’s participation in the global value chain remains lowest, with export basket dominated by primary commodities and natural resources, accounting for less than 3 percent of world trade.

“Currently, at 15 percent, intra Africa trade compares unfavourably to Europe (68 percent), North America (37 percent), and Latin America (20 percent). Under the AfCFTA, intra African trade is projected to rise to 52 percent by 2040, and Africa will have a combined consumer and business spending of USD6.7 trillion by 2030.”

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Dr Lawrence Tax emphasized that AfCFTA will have a significant impact on manufacturing and industrial development, tourism, intra-African cooperation, and economic transformation.

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