Africa: The Impact of Free Trade and Technology on Africa's Development

opinion

When the Africa Continental Free Trade Area is implemented this year, it will create a single market for goods and services for the first time in the continent's history. The agreement will cover a geographic area with a combined GDP of $3.2 trillion and a population of 1.2 billion people. It has the potential to drastically accelerate economic growth and exceed the African Development Bank's current estimates for GDP growth from $1.7 trillion in 2010 to more than $15 trillion by 2060.

This has the potential to shift Africa from being an aid-dependent continent to becoming an investment-dependent continent. According to the Brookings Institute, African foreign direct investment (FDI) inflows accounted for only 2.9 percent of total global FDI inflows in 2017, compared to the 49.8 percent share for developed economies, and 10.6 percent for Latin America and the Caribbean. A continental super bloc has the potential of creating an attractive value proposition for investors who are dealing with the fallout from Brexit, a U.S.-China tariff war and a global economy that is falling short of projected growth targets.

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