In brief, AfCFTA will create a single market for goods and services, in hopes of boosting trade among its nations. Africa has historically had low internal trade. In 2017, intra-African exports were 16.6% of total exports, compared with 68% in Europe, and 59% in Asia.

The agreement will work towards a continental customs union; eliminate tariffs on 90% of intra-Africa goods; aid in the movement of capital and people between countries; facilitate external investment; and reduce non-tariff barriers, like the time it takes goods to pass through customs.

AfCFTA has the potential to increase intra-African trade by over 50%, according to the UN Economic Commission for Africa, while the World Bank suggests the agreement could mean an added $76 billion in income for the rest of the world.

Despite the clear benefits and historic accomplishment, experts say the agreement will face a number of hurdles in practice, like a lack of modern and efficient infrastructure, unclear information about processes, and barriers for women-led businesses, and the economic destruction brought on by Covid-19 that could reverse years of progress in the region. Some also fear that large economic gains made in the diverse economies will be unequally distributed.

Regardless, there are high hopes for the agreement.

“We want to move Africa away from this colonial economic model of perpetually being an exporter of primary commodities for processing elsewhere,” the trade bloc’s secretariat Wamkele Mene told the Financial Times. “We want to stop approaching tariffs as a tool for revenue. We want tariffs to be a tool for industrial development.”

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