Free Trade in Africa will Enhance Business Innovation - Peter Bismark

African leaders have launched the long awaited Continental Free Trade Area (CFTA) in Kigali, the capital of Rhwanda as part of African Union’s flagship programs of agenda 2030. This is one of  African Union’s (AU) strategic framework for socio – economic transformation agenda for growth and development. According to the AU, it envisage seeing Africa more prosperous by significantly accelerating growth of Intra –Africa trade and use trade more effectively as an engine of growth and sustainable development, through doubling of Intra – Africa trade by 2022 to strengthen Africa’s common voice and policy space in global trade negation. This would compel country members to remove about 90% tariffs on goods and create a free market in the industrial and service economy, as well as non – tariff barriers that poses constraints and undue delays at the country borders.

Common Market

Boosting trade and market economy (in trade –Africa -trade) is the answer to seeing Africa prospers. In 2010, only 10% made up of the continental total trade and 16% in 2016, according to (UNCTAD). A common market would make trading among countries easier for a free flow transaction and exchange of goods and services .It will enable both products and people to cross into one country for mutual exchange reducing restrictions with little or no cost of tariffs paid on goods. Four things are expected to move freely across boarders: Ideas, People, Products, Services and Assets through voluntary exchange.

A common market is not just common for common goods but for the respect of individual choice and market forces of demands and supply that control prices for competition and innovation to take center stage for economic growth instead of government elite regulations. According to Fred MeMahon of the Fraser Institute, Free Markets promote economic freedom and creates mutual incentives. Consumers who are free to choose will only be attracted by superior quality and price. Producers and sellers, including new ones are welcome to the marketplace and face incentives to constantly improve the price and quality of their products. This will obviously yield billions of mutual beneficial transactions occurring every day to power this dynamic and spur increased productivity and prosperity, job –creation and reduce poverty.

Voluntary exchange and transactions are to be replaced by government regulations and interposition across borders to enhance entrepreneurial innovation and ease of doing business. Individual investors would like to innovate to stay in competition. It will not be of battle for innovation only but value for innovation, consistency, packaging and distribution. This trade liberalization policy would not only promote mutual exchange or price stability but would help enhance and increase trade volume. This legal and political program is bringing 55 member state of AU with a total of $2 trillion gross domestic product (GDP).

When trade grows more wealth is created leading to more infrastructures for smart cities. Africa needs trade not aid.