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Commit to the African Continental Free Trade Afrea (AfCFTA) and open digital trade
The AfCFTA, the world's largest free trade area, came into effect on January 1, 2021, as a significant milestone in fully implementing Africa’s free trade agreeement. The AfCFTA eliminates tariffs on 90% of goods produced in Africa, and has the potential to transform the continent with its potential market of 1.2 billion people and combined GDP of around $3 trillion across the member states of the AU. The AfCFTA is a positive step for the innovation ecosystem, as it gives startups and SMEs access to more than 50 countries, facilitating regional expansion, and attracting more investments. In addition to increased funding, the harmonised African market entrenched in the AfCFTA will enable consumers to access lower-cost online content and services. The United Nations Economic Commission for Africa (UNECA) estimates that the AfCFTA has the potential to double intra-African trade if there is a reduction in Non-Tariff Barriers. Despite the enthusiasm for the AfCFTA, traders, SMEs and startups on the continent continue to face numerous market access challenges. These include the differing regulatory bodies and intra-jurisdictional obstacles such as work permits, licences and taxes, excessive delays, ad hoc fees at borders, cumbersome document requirements, restrictive product standards, regulations and packaging requirements. These limita- tions impact the ability of the enterprises to leverage economies of scale AfCTA pro- vides to achieve meaningful growth and profitability.
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