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Africa is the continent in the world by land mass and the second-largest continent based on population. The reserves of diamonds, platinum, gold, and many other resources can be found on the continent. Africa also holds of the world’s arable land and a of the earth’s internal renewable fresh water supply. Although carrying an ample supply of resources, land, and population, Africa is one of the poorest countries in the world. Around Africans live below the extreme poverty line. In May 2019, the African Union signed the (African Continental Free Trade Area) into place, which can be the first massive step toward economic growth.
The is the largest free trade area in the world. 55 African Union member states signed it, and have officially joined the free trade area. AfCFTA plans to spark intra-African trade and between member states. Tariffs on around will gradually be reduced and fully taken out. AfCFTA hopes also to job creation and interest in investing in African countries. Based on , the free trade area could raise average income by 9% and take 50 million people out of extreme poverty by 2035. One of the first initiatives under AfCFTA was the Guided Trade Initiative (GTI). The GTI creates trade with a specific group of countries within the trade agreement and plans to test the effectiveness of free trade and the operation and policies that come with it. The GTI started with eight countries, including Egypt, Kenya, and Cameroon, but the number of countries is expected to grow annually. Shipments of , a Kenyan tea company, to Ghana commenced the kickoff of the new GTI earlier in October. An estimated are expected to be traded under the GTI, with more expected to join yearly. Although the actions under AfCFTA are still in the start-up stages, the promising outcomes are still apparent across Africa, especially in the agriculture industry.
Agriculture is one of the essential industries in the whole continent. As of 2020, of Africans were employed in agriculture. Agriculture also makes up about of the continent’s GDP. Agriculture is expected to grow with AfCFTA and could become one of its in the coming years. Smallholder farmers already account for of African food production and could reach larger supply chains while meeting local needs. By 2030, intra-African agricultural trade could increase by , based on projections. The boots also can be seen in other sectors surrounding agriculture, including the fertilizer industry. Russia, the world’s top fertilizer export, is raising prices. The world price of fertilizer has hit a peak not reached . This and the initiative to turn towards more eco-friendly products have led to a world in fertilizer. The Dangote Group, a Nigerian conglomerate, could help solve this issue. The group created a fertilizer production facility for , a low-cost fertilizer. The plant expects to make from foreign investors. Countries such as Morocco, Ethiopia, and Ghana also plan to invest in fertilizer plants.
The African Continental Free Trade Area is a big step in building the economy of countries all around Africa. Whether it’s projections to raise the average income, help the production of agriculture, or help raise the interest of foreign investment, the AfCFTA is a very intriguing development for all countries involved. Free trade is still beginning but expect African countries to play more significant roles in business and economics in the upcoming years.
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