AfCFTA: Are East African economies ready to compete?

The Eastern African region is gearing up to capitalize on the vast economic opportunities presented by the African Continental Free Trade Area (AfCFTA). With an estimated $1.8 billion in revenue and over 2 million new jobs projected to be generated through AfCFTA, countries in East Africa are making strides to enhance their competitiveness in the global market. In a recent interview with CNBC Africa, Mama Keita, the UNECA Director for East Africa, shed light on the region's readiness to embrace the challenges and opportunities that come with AfCFTA implementation. Keita highlighted the importance of ratification as a crucial step for countries to participate in the single market envisioned by AfCFTA. Among the 14 countries in East Africa, six have already ratified the agreement, including Rwanda, Kenya, Uganda, Djibouti, South Sudan, and Somalia. While these countries have taken the lead in the ratification process, others like Burundi, the Democratic Republic of Congo, and Comoros are actively preparing to join the agreement. Keita emphasized the significance of formulating an AfCFTA implementation strategy to ensure a smooth transition into the single market. One of the key competitive advantages for East Africa lies in the service sector, particularly in air transportation. Keita pointed out that Africa faces significant infrastructure gaps, and efficient air transport is essential for the success of AfCFTA. Countries like Rwanda, Kenya, and Ethiopia are focusing on scaling up their air transport networks to facilitate the movement of goods, people, and promote tourism. By leveraging their expertise in the service sector, East African nations can position themselves as key players in the evolving market landscape. In addition to the service sector, agriculture presents a significant opportunity for East African countries to thrive under AfCFTA. With a projected market size of over 1.3 billion people, the region has immense potential to meet the growing demand for agricultural products. Agriculture already contributes significantly to the GDP of several East African nations, and by enhancing regional cooperation and infrastructure, countries can tap into this lucrative market and boost economic growth. Despite the promising prospects offered by AfCFTA, challenges in regional integration persist, particularly in infrastructure connectivity between neighboring countries. Keita acknowledged the existing barriers to seamless travel and trade within the region, such as limited direct flights and inefficient transport networks. However, she expressed optimism about the potential solutions under AfCFTA, including initiatives like the single airspace project aimed at improving air transportation across the continent. To fully capitalize on the opportunities presented by AfCFTA, East African countries must collaborate closely, address common challenges, and enhance regional connectivity. By fostering a more integrated and efficient transport network, the region can unlock its full economic potential and emerge as a competitive player in the global market. As the implementation of AfCFTA progresses, East African economies are poised to harness the benefits of increased trade, job creation, and economic growth. By embracing the principles of regional cooperation and economic integration, countries in the region can pave the way for a more prosperous and sustainable future.