Why should we trade with Africa?

Egypt hosted the gathering of african leaders who signed a new agreement forming the continent's largest free-trade zone, covering 26 countries in an area from Cape Town to Cairo.

This agreement - which is known as The Tripartite Free Trade Area (TFTA) - is intended to ease the movement among the member states, an old dream of african economic integration since 1910, even before the europeans ever thought of forming the EU.

The TFTA contains 3 existing economic blocks; the Southern African Development Community (Sadc), the East African Community (EAC) and the Common Market for Eastern and Southern Africa (Comesa).

The reasons for signing such agreement for Egypt are:

• Political & Security Issues: Egypt seeks to fix the mistakes of its former regimes which purposely ignored the dark continent, which negatively contributed to the fading of the egyptian political, economic and cultural role in africa. Egypt paid a fatal price to its african absence in terms of losing its water security as Ethiopia started building the huge millennium dam that could thirst Egypt for a period of time. Africans are waiting for Egyptians to lead as they used to do.
• Egypt's top trade partner is The EU (almost 31% of total egyptian imports and exports are with the EU), after that comes the arab countries ,asia and Africa is at the end of the list. Europe has been suffering a financial crisis and a disturbing economic situation that may lead some countries to Exit the EU. That 's a sufficient reason for egypt to search for a stable, developing, ambitious alternative for its international trade. Africa is the perfect match ( as i will explain later)
•  Africa - despites what's popular with most egyptians - has 6 of the fastest developing economies in the world! Countries in the sub-saharan area has a steady rate of growth that's not less than 5%. Africa is opening its markets to the world with more than 50% of population less than 20 years old. This youth has new demand pattern and within a few years will be a huge force for production and growth.
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• Multi-National Corporations like IBM. GE, Walmart are opening facilities in Africa, this entails a perfect opportunity for investment and export operations. 
• Marketing Egyptian products will be much easier in Africa than EU/Other developed nations which demands high production, legal and environmental standards. These standards forced the egyptian exporter to focus on exporting raw material and agricultural products, by the time the african market is in deep need for a wide range of fully manufactured products.
• TFTA Market consists of 26 countries with more than 625 million people. A very large market and a great opportunity especially in the presence of a free trade agreement, eliminating the tariff barriers ,reducing prices of goods and increasing their competitiveness.

• Africa is full of raw materials that can be imported as inputs to manufacturing operations. Africa acquires 40% of the world reserve of gold, 80% of platinum and 60% of  Diamond. Also has 60% of the world's uncultivated agricultural lands. Africa is a continent of chances that has been ignored for ages|

• A free trade agreement with Africa would motivate foreign investors would to invest in establishing manufacturing plants in egypt that imports raw material from african countries and/or export finished goods to them with competitive prices. Which will benefit the egyptian economy, lower the unemployment rate and saves the country form rising inflation.
• Proposed plans for suez canal area to establish logistics value adding centers can make good use of such agreement by importing african raw material and components, then re-exporting them as finished products. This form of integrated production matches both the purpose of the agreement and the egyptian vision for the future.
• The agreement can be a step for economic integration, by forming a common market ( as the EU), allowing the free transfer of goods, capital and individual employees without restriction. Egypt will be in a better position inside that african block.

levels of economic integration

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Mohamed Salah El Din,

Alexandria, Egypt

12.06.2015