The African continent is the second most-populated continent in the world, home to over 1.2 billion people, or 16% of the world’s population. Despite this, Africa currently only accounts for less than 2% of international trade and global manufacturing.
Industrialization for development
Africa’s economic emergence and transition from a continent of low-income into middle-income economies, requires transforming the economic structure from predominantly agrarian and extractive activities to more vibrant and value adding industrial sectors like processing, manufacturing, tourism, etc.
The important contribution of inclusive and sustainable industrial development in helping Africa overcome its critical development challenges is clearly recognized in the 2030 Agenda for Sustainable Development, within Sustainable Development Goal 9 (SDG9), calling to build resilient infrastructure, promote sustainable industrialization and foster innovation, and Agenda 2063, encompassed in Aspiration 1 of the First Ten-Year Implementation Plan, under “a prosperous Africa based on inclusive growth and sustainable development”.
Regional integration and free trade
To realize their potential, African countries also need to promote regional integration and intra-regional trade. Although it is widely recognized that intra-regional trade could play a significant role in accelerating economic growth and poverty reduction and enhancing food and energy security in Africa, the continent continues to trade little with itself.
Following the unveiling of the African Continental Free Trade Agreement in Kigali, Rwanda, in March 2018, Africa is about to become the world’s largest free trade area by number of countries. So far, 49 African countries signed the agreement meant to create a tariff-free continent that can grow local businesses, boost intra-African trade, rev up industrialization and create jobs.
According to the UN Economic Commission for Africa (ECA), if all 55 African countries join the free trade area, it will cover more than 1.2 billion people and a combined GDP of $2.5 trillion. The ECA adds that intra-African trade is likely to increase by 52.3% by 2020 under the African Continental Free Trade Agreement, and the UN Conference on Trade and Development expects Africa to gain more industrial and value-added jobs because of intra-African trade, hence contributing to Africa’s industrial transformation and prosperity as envisaged in African Union Agenda 2063 and the 2030 Agenda.