By Professor Landry Signé, David M. Rubenstein Fellow in the Global Economy and Development Program and the Africa Growth Initiative at the Brookings Institution, Distinguished fellow at Stanford University’s Center for African Studies, Chairman of the Global Network for Africa’s Prosperity, and author of “Innovating Development Strategies in Africa: The Role of International, Regional and National Actors.”
Learn more about this timely topic at the upcoming
18th International Economic Forum on Africa
Africa has an opportunity to show leadership on the world stage through strength in unity, as the rest of the world retreats from multilateralism and increases protectionism. For the first time in recent history, with the African Continental Free Trade Area (AfCFTA), Africa could wholly embrace intra-African relations, global trade, structural transformation and sustainable development. But for the agreement to succeed, businesses, which make up the backbone of the deal, need to be aware of their potential gains and be actively involved in its implementation, working alongside governments and regional institutions that are ultimately responsible for speeding up the process.
The challenges to African trade have been immense: Africa only represents 2.4% of total global exports. Intra-African trade only represents 15% of total African exports (compared to 58% and 67% for Asia and Europe, respectively), even if the regions of Eastern and Southern Africa are outperforming Central Africa.
The AfCFTA, launched with signatures from 44 African countries in March, has the potential to open up the free movement of goods, services and people, building the capacity of African businesses. If successfully implemented, the AfCFTA could generate a combined consumer and business spending of USD 6.7 trillion by 2030, accelerate industrial development, expand economic diversification, and facilitate quality job creation — including for youth (72% of poverty rate), women (majority of small-scale traders), and small and medium-sized enterprises (SMEs) (about 80% of regional employment).
But all this will depend on how well businesses are able to engage in the deal’s implementation. These are a few things they need to know:
African countries trade much more with countries outside the continent than with each other within the continent. According to the United Nations Economic Council for Africa, trade between African countries stands at about 16% of the continent’s total trade, the lowest intra-regional trade globally. Compare this with 19% intra-regional trade in Latin America and 51% in Asia.
A young lady in a remote village in northern Vietnam is using new technology to create and sell her family’s traditional silver necklace designs to customers across the region and even globally who can collect their purchases directly from 3D printing facilities.
When prices of staple food crops soared in international markets in 2007-10, it was a wakeup call for many world leaders to take action. In view of millions of families being pushed into hunger, the G20 decided to create the 
