AfCFTA & YOUTH
Key to the success of the AfCFTA will be the policies developed at state level to better integrate women and youths, who make up the biggest portion of the work force, into value chains and provide better opportunities for these groups. The AfCFTA framework will help to guide domestic policy and AfCFTA implementation.
The term youth covers those aged 18-35 across the continent. This group is crucial to the success of the AfCFTA given that Africa is the youngest continent in the world. According to the UNDP Futures Report youths are 1.6 times more likely to be entrepreneurs, the new continental market therefore offers an opportunity for youth businesses to trade and grow, eventually into overseas markets.
Trade in Services
Youths are most present in service sector businesses such as culture, heritage, music, fashion and digital services. These represent significant growth markets.
The services industry accounts for 55% of GDP growth in African countries, but only 2% of total global trade in services, suggesting a strong potential for growth which a young entrepreneurial demographic is primed to take advantage of.
The protocol on trade in services seeks to boost intra-African trade by removing the barriers to the movement of people and capital, something young people are more likely to take advantage of with the average age of an economic migrant from Africa in 2018 being 29. This protocol specifically mentions the need to build trade capacity for youth and women.
This service sector growth will be driven in part by digital trade, which according to World Bank estimates is growing by 40% year on year. With digital capacity building written into the AfCFTA and The Digital Transformation Strategy for Africa (2020-2030), youth business is well placed to take advantage of this rapidly growing market.
AfCFTA youth in practice
Ugandan businesses have been partnering with The Netherlands Trust Fund Phase IV as part of the Export Sector Competitiveness Programme to boost export capacity of SME businesses. Youth lead service sector businesses have benefitted from this, such as GnuGrid an artificial intelligence company that collects data on solar power company energy usage to streamline the industry. The AfCFTA will help GnuGrid secure investors by providing a framework for pipeline investment. This will help the company grow beyond Uganda’s borders into other regions which are also producing solar energy.