The discussion around AfCFTA’s benefits is becoming more robust as member states accelerate the implementation of the trade bloc, which brings together 54 African Union countries.
AfCFTA objectives aim to boost Africa’s global standing as well as intra-continental trade. Other objectives include opening up new markets for South Africa, improved access to intermediate inputs and raw materials, and enhanced opportunities for in-country value addition. Individual economies will be positioned higher in global value chains by expanding industrial capacity and creating jobs, and developing regional value chains, among other things.
“The AfCFTA offers investors access to an integrated single trade and investment market of more than 1.3 billion people, with a gross domestic product that is estimated to exceed $3.5 trillion by 2025. Right now, however, there is little evidence to suggest that this potential is being adequately recognised. At present, intra-African trade is very low, estimated at around 15%, compared to 67% in Europe, 61% in Asia and 47% in North America,” said TP Nchocho, CEO of the Industrial Development Corporation in a media statement.
The creation of an enlarged regional market could provide long-term economic benefits by acting as a catalyst for greater cross-border infrastructure development, encouraging economic diversification and improving institutional quality.
The African Continental Free Trade Area (AfCFTA) is a major opportunity for Africa to industrialize and diversify its economies. The continent has a wealth of natural and mineral resources, which can be used to build industrial capacity and create new products and services. The AfCFTA will create a single market of over 1.3 billion people, which will attract foreign investors and boost intra-African trade.
The development of regional trade will allow companies to achieve economies of scale and create opportunities for cross-border collaboration, resulting in increased investment activity.
Founded in 1940 by an Act of Parliament (Industrial Development Corporation Act, 22 of 1940), the Industrial Development Corporation of South Africa Limited is fully owned by the government.
The IDC’s priorities align with the national policy direction outlined in the National Development Plan (NDP), the Industrial Policy Action Plan (IPAP), and the Sector Master Plans.
“The AfCFTA symbolizes the emergence of a more assertive continent that no longer mainly exports raw materials and imports finished goods. The bolstering of trade ties between countries will strengthen Africa’s industrial base and open up opportunities for the continent to become more self-sufficient,” said the Industrial Development Corporation (IDC).