The recent establishment of the African Continental Free Trade Area (Zlecaf) is, according to experts in the world economy, a royal door to the exponential economic development of Africa. In addition, it will be able to consolidate relations between African nations. This will allow them to better face the Western powers. To put it simply, the Zlecaf stipulates that trade between States African countries are no longer subject to customs constraints.
A 50% increase in trade announced
In a report published some time ago, the International Monetary Fund (IMF) announced that the effective establishment of the Zlecaf will have very positive economic repercussions on the continent. In particular a 50% increase in trade in Africa.
Among the advances that this initiative could have, there is the impact on trade between African countries and the rest of the world. With a drastic drop in imports of 7% and an increase in exports of 29%. With a direct implication on the median GDP per capita. This GDP should increase to 10%.
The implementation of this free trade area provides for the total elimination of customs duties over 5 years for the most developed countries on the continent, and over 10 years for other countries. 53 of the 54 countries on the continent have signed this agreement. With the exception of Eritrea. The Zlecaf entered into force on the continent in January 2021 instead of July 2020 as initially planned, because of Covid 19.
IMF fears
However, the IMF has reservations about the expected results of this process. For the institution of Breton Wood, the Zlecaf will have a significant impact only if the measures already taken are accompanied by the improvement of the business climate across the continent. The IMF also advises African countries to modernize the social safety net in order to support the most vulnerable during the transition phase.
