The African Continental Free Trade Area (AfCFTA) agreement, which came into force in February 2021, is set further to strengthen agriculture’s role in the continent’s economy. The agreement is projected to host 1.7 billion people and oversees $6.7 trillion in consumer and business spending by 2030, making it one of the world’s largest free trade areas. Given agriculture’s already central role in the continent’s economy, and its vast growth potential, it is expected to be a prime beneficiary of the AfCFTA.
The World Economic Forum’s Insight Report on the AfCFTA deal suggests that agriculture has exceptional potential for increasing intra-African trade, meeting local demand, accelerating GDP growth, creating new jobs, and improving inclusivity due to upstream and downstream linkages. With the AfCFTA in full swing, agriculture and agro-processing will be a driving force for new investment from abroad, within the continent, and outside of it. African-owned and run businesses will benefit from this intra-continental trade boost.
Agro-processing has important implications for African food security, job creation, and poverty reduction. With new investment opportunities arising, this growth in agriculture and agro-processing will create job opportunities and increase economic growth across the continent. According to the Forum’s report, the AfCFTA is projected to increase intra-African agricultural trade by 574% by 2030 if import tariffs are eliminated. This is a massive victory for a continent historically relying on foreign economies for agricultural inputs.
The African Continental Free Trade Area agreement is expected to benefit the continent’s women as well. Agriculture plays a significant role in the lives of many African women, and the growth of this industry could mean more excellent economic opportunities for them. Moreover, increased investment in agro-processing will also provide new opportunities for farmers and entrepreneurs, particularly those in rural areas, where economic opportunities are often limited.
Companies such as The Coca-Cola Company and OCP Group have recognized the potential of the AfCFTA to bring unifying standards for fertilizer regulation and increase intra-African trade for agricultural goods and supplies. By building a comprehensive, continental, field-to-fork value chain, Yara’s “Africa for Africa” strategy focuses on investing in current and aspiring farmers, retailers, distributors, technology developers, and agro-entrepreneurs. These companies showcase the lucrative and growing opportunities within agro-processing and agriculture across the newly connected African continent.
Read more on the report here.