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How the AfCFTA could help the U.S. improve its trade strategy in Africa?


In the last two decades, there have been three major shifts that have worked together to cultivate a new Africa-an Africa that requires a different approach to trade and economic investment. First, there are China’s development initiatives, which have resulted in roads, rails, bridges, and airports. China has also invested massively in mining, fishing, and manufacturing. And shown African leaders the possibility of a development model that Africans can see and touch. The second major shift is the birth of the African Continental Free Trade Areas agreement, or AfCFTA, which has been a groundbreaking opportunity to create an industrial revolution in Africa and opt out of the types of deals that keep the continent at the bottom of global production, trade, and investments. Third, the creation of Agenda 2063—the African Union’s development blueprint with a goal to attain sustainable economic growth and development.

The considerable influence of China in African markets shows that the United States has been lagging in maintaining its commitment to continue investing in Africa. Agenda 2063, adopted by the African Union Summit in January 2015, is the compass for Africa’s future. When AGOA was enacted, there was no continent-wide development strategy to which all African Union member states subscribed.

At the heart of Agenda 2063 is the integration with the African Continental Free Trade Area agreement, industries that will create wealth in Africa, and the movement of people as key priorities, and this requires looking beyond trade to include investments in complementary factors such as technology, human capital, and productive capacities. To that end, the United States must incentivize American institutions and companies to share technology that advances Africa’s industrial drive, with a focus on diversification and away from exporting raw materials. This approach to U.S. relations with Africa requires investments in concrete industrial projects within Africa so that the partnership can enable African economic growth.

The primary responsibility to create conditions for prosperity lies with African countries themselves, their governments, and their people. Ensuring that African governments prioritize improving their own performance must be an important part of the U.S.-Africa partnership. Thus, boosting the capability of standards, i.e. setting institutions, testing laboratories, and export facilitation are some areas that African governments should prioritize as a down payment for greater results from this partnership. Undeniably, this would benefit initiatives under AGOA and AfCFTA.

The novelty of AfCFTA is that it is a trade-led solution out of the poverty trap that gripped African countries for decades. By opening up markets for infra-African trade, AfCFTA creates opportunities on the continent: an approach that differs from Africa’s trade with the rest of the world, including the United States, which is largely dominated by exporting raw materials. A post-2025 US-Africa partnership must correct most of the trade issues that the continent is facing—including through strengthening US investments within Africa and leveraging capabilities of US enterprises to produce goods with African businesses.

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