[News Terms] The World's Largest Economic Community, the Africa Continental Free Trade Area

On the 4th, interest in the ‘African Continental Free Trade Area (AfCFTA),’ a massive single market with a population of 1.4 billion, is rising following South Korea’s first-ever multilateral summit hosted against African countries.

President Yoon Suk-yeol is delivering the opening address at the opening ceremony of the 2024 Korea-Africa Summit held at the Korea-Africa Summit Hall on the 4th. [Image source=Yonhap News]

AfCFTA is an intra-African free trade area joined by 54 of the 55 African Union (AU) member states, excluding Eritrea, with 47 countries having ratified it. It was promoted as a flagship project of the AU’s ‘Agenda 2063,’ adopted in 2015. Agenda 2063 is a slogan presenting the direction and framework for transformation to be pursued over the next 50 years in economic, social, political, cultural, diplomatic, and human rights fields for Africa’s sustainable development. It advocates inclusive growth and Pan-Africanism as ‘universal values.’ Launched in 2019, AfCFTA was designed as an economic community where goods and services move freely without any barriers in line with this purpose. Accordingly, AfCFTA plans to gradually eliminate tariffs on 90% of intra-regional goods and eventually abolish them entirely. It also intends to unify extraregional tariffs on non-member countries.

AfCFTA is considered the largest free trade area since the establishment of the World Trade Organization (WTO) in 1995 in terms of the number of signatories. The member countries have a combined population of 1.4 billion, and the total gross domestic product (GDP) of the 54 signatories is estimated at $3.4 trillion. Notably, 70% of the African continent’s population is under 30 years old, making AfCFTA the youngest free trade area in the world.

It is also an economic community rich in mineral resources. The African continent, which accounts for 20% of the Earth’s land area, holds 30% of the world’s mineral resources. It is abundant in key raw materials for strategic industries, such as chromium, manganese, and cobalt, which are essential for next-generation batteries. For South Korea, which needs to reduce its high dependence on Chinese resources, resource-rich Africa could be a practical alternative to decoupling from China.

Although AfCFTA is an economic community of the African continent, its diplomatic influence within international organizations such as the United Nations General Assembly cannot be overlooked. Africa leads discussions on peace and security agendas in the international community, and the AU, which leads AfCFTA, plays a ‘casting vote’ role when contentious issues arise.

Meanwhile, the Presidential Office announced that, taking advantage of the Korea-Africa Summit held from the 4th to the 5th, 12 treaties and agreements and 34 memorandums of understanding (MOUs) were signed between South Korea and African countries. Notably, two MOUs on critical mineral cooperation, six on the Trade and Investment Promotion Framework (TIPF), and three on infrastructure and mobility cooperation were signed, and declarations to commence negotiations on two Economic Partnership Agreements (EPAs) were made. The Presidential Office explained that this represents the largest diplomatic achievement South Korea has attained with African countries.