African countries are forging ahead to complete negotiations for a continental free trade area between 55 countries by early next year. The idea, adopted by the African Union in 2012, is to create a single market which includes the free movement of goods, services and people. The integrated African market covers 1.2 billion people and a combined GDP of over USD$3.5 trillion.
Large markets are job-creating as they support more trade in goods, services and assets. It is expected that a well designed agreement would help Africa boost industrial development, promote economic transformation and create new wealth. The benefits won’t be automatic but will require continuous national, regional and continental efforts.
Large regional markets are also essential for industrialization. This is because they attract investment into firms that can diversify their product lines and stimulate the creation of related industries. This includes the supply of spare parts, distribution of goods and provision of advisory services. Some of these may start as their supplies but they may also grow into independent enterprises. Full Story