Africa-wide trade agreements pay off for Mozambique: Exports to Africa surpass $1.5 billion in one year, fueled by increased intra-African trade opportunities.

The African Continental Free Trade Area (AfCFTA), launched in 2021, has initiated its first trade between Kenya and Ghana. This historic move marks a significant step towards the integration and growth of the African economy.

One of the countries expected to benefit greatly from this free trade agreement is Mozambique. The AfCFTA is set to diversify Mozambique's export markets beyond the Southern African Development Community (SADC), providing a broader basis for its exports.

Mozambique's exports to other African countries over the past year reached $1.5 billion, accounting for a substantial portion of its total exports. The AfCFTA aims to remove tariffs on up to 90% of goods and cut non-tariff barriers, which is expected to lower trade costs for Mozambican exports.

Currently, sustained growth in agricultural exports is around 13%, representing 12% of total exports. However, micro, small, and medium-sized enterprises contributed only 19% of total exports, indicating a potential for growth in this sector.

Economic partnership agreements accounted for 49% of total exports for Mozambique over the past year. The AfCFTA could potentially expand these partnerships, as African countries that have supplemented the agreement include members of regional economic communities like ECOWAS in West Africa and other African nations involved in strengthening intra-African trade under AfCFTA.

The World Bank Report from July 2020 suggests that the AfCFTA could boost regional income by $450 billion and potentially pull millions out of extreme poverty in Africa. The AfCFTA covers 1.4 billion people across 55 countries, offering a vast market for Mozambican goods.

In preparation for the AfCFTA launch, African Finance Ministers have scheduled a meeting to discuss a Continental Payment System, which could further facilitate trade between African countries.

As the AfCFTA continues to expand and evolve, it has the potential to reshape Africa's economic future, building a more integrated, competitive, and resilient continent. The first trade between Kenya and Ghana is just the beginning of this transformative journey.

Africa-wide trade agreements pay off for Mozambique: Exports to Africa surpass $1.5 billion in one year, fueled by increased intra-African trade opportunities.