Less tariff barriers and NTBs, and harmonized rules will make Africa a more attractive market

An Africa with less tariff and non-tariff barriers, and with harmonized rules among its states will make the continent a much more attractive market for the U.S., allowing American businesses to operate more consistently across the continent. These are, in short, the advantages that US (and other foreign countries’) firms will obtain once the AfCFTA will be fully operationalized, as summarized in the transcripts of the recent held US-Africa business forum.

The continental free trade agreement is expected to attract significant foreign direct investment in Africa, as it will give the opportunity to international investors to establish productive units in one or more African countries from where they will be able to serve all the African states that have ratified the agreement without the application of the tariff and non-tariff restrictions that currently stifle intra-African trade. This possibility is already offered by existing free trade areas and customs unions, but the perspective of accessing to a huge continental market is more attractive for foreign firms than that of serving a single region in Africa.

The necessary prerequisite, obviously, is that the products manufactured by such foreign firms will qualify as “originating” from those African countries where they will settle, according to the AfCFTA rules of origin.

The transcript of the outcomes of the US-Africa business forum is available here.