AfCFTA: UN Agency Forecasts $3.4 Trillion Market on Full Implementation

•Urges African nations to invest in infrastructure, streamline trade policies

Ndubuisi Francis in Abuja

The UN Trade and Development (UNCTAD) has predicted that full implementation of the African Continental Free Trade Area (AfCFTA), could create a $3.4 trillion market on the continent, but observed that unlocking the vast potential would reqiuire stronger intra-regional trade, strategic investments and bolder economic reforms.

These include investing in infrastructure by expanding transport, energy and information communications technology (ICT) networks, streamlining trade policies and processes in areas such as customs and supporting industrialisation through incentive tax breaks as well as affordable interest loans that can boost manufacturing and regional production.

These are contained in the just-released 2024 Economic Development in Africa Report by the UNCTAD Secretary-General, Rebeca Grynspan and Côte d’Ivoire’s Minister of Trade, Industry and SME Promotion, Souleymane Diarrassouba.

The report highlighted how Africa can transform economic vulnerabilities into opportunities through trade, investment and regional integration, and how macroeconomic reforms and innovative financial tools can help stabilise economies and reduce reliance on volatile global markets.

It stressed that investing in infrastructure, trade diversification and small and medium-sized enterprises (SMEs) was key to unlocking growth and driving sustainable development.

According to the report, Africa’s reliance on commodity exports, high trade costs and weak infrastructure make it highly vulnerable to external shocks, and prescribed key areas for action.

These include reducing dependence on volatile markets, lowering costs, and strengthening SMEs, adding that close to half of African countries rely on oil, gas or minerals for at least 60 per cent of export earnings, thereby exposing them to price fluctuations.

It, therefore, recommended diversifying exports, explaining that boosting intra-African trade would create more stable revenue streams.

“Africa faces serious challenges – from volatile global markets and high debt costs to infrastructure gaps.

“But these challenges are also a chance to reshape the continent’s economic future. With bold reforms, investment and full implementation of the AfCFTA, Africa can emerge stronger, more resilient and more competitive,” said UNCTAD Secretary-General, Rebeca Grynspan.

The report further explained that  infrastructure gaps in transport, energy and  ICT make trade 50 per cent more expensive than the global average, and limiting competitiveness, especially for landlocked nations, adding that investing in logistics and digital connectivity was critical to unlocking growth.