Reaping the Benefits of African Continental Free Trade Agreement (AfCFTA)

Abstract

Africa’s Continental Free Trade Agreement (AfCFTA) aims to boost intra-Africa trade and to ultimately improve the lives and welfare of Africans. Through a discursive analysis of human capital theory and its relationship with gains to trade, this paper analyses the state of Africa’s human capital in readiness for AfCFTA and provides some policy recommendations. Gains to trade are theoretically and empirically more beneficial to countries with human capital accumulation. Most African countries still have low human capital levels and may not be able to reap the benefits of an integrated free trade area that AfCFTA portends, in terms of employment generation. African countries require a coherent human capital development strategy. This paper recommends a three-pronged approach that includes identifying specific areas of comparative advantage, shifting focus away from the export of natural resources and primary products and developing the knowledge and skills required in the areas of comparative advantage identified.