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Why You Should Consider Africa For Your Next Trading Venture
21 Jul. 2018


Africa’s positive highlights

From 2017 to present there has been an annual growth rate of 2.6% with projected rate to increase this year. Several of the African member states have shown more than 6% growth, especially since commodity prices recovered considerably after 2017. With the promise of an official 2018 African Trade Agreement, investors’ keen eye has added to this growth on the continent.

 

Now, the most important aspect of the Continental Free Trade Area (CFTA) agreement to come into action this year, will affect the percentage of intra-African “export” costs, which are currently high and report only a 15% share of the total African trade, whereas if the CFTA were in place already, it would show that the goods accounted for are set at a higher percentage of over 40%.


The problems that have huge investment opportunity

Africa has a problem that it has been trying to battle for decades: the vast increase in its population—but this isn’t the main factor that affects trade directly; rather, it’s the dramatic increase in the youth population who remain unemployed. It is through the youth that a country can expect to grow and deliver a higher GDP.


However, although this may be seen as a problem, there is a great solution in it too – if the CFTA is adhered to as set out in its plans, which is to encourage growth among African states, and in particular, through its open trade options, to provide ample job opportunities for willing unemployed young workers. This will dramatically improve the growth of any African country.


Why this Agreement is the game changer Africa needs

Never before have the African economic leaders come together to address a problem with the one solution that has the ultimate power to overthrow the destitute economic situation among many member states. It is through the agreement of the CFTA that such vast economic changes will occur.

 

Investors will find the efforts brought forth from the CFTA as positive and extremely lucrative. Having a free trade agreement among African states will eliminate the high cost of transporting goods, which will help companies utilise such unspent monies on other important aspects of business such as education and an openness to increase employment opportunities. Furthermore, as a single market with a potential tap of over $3 trillion in GDP, the CFTA will become the most attractive agreement for investors around the world.


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