Answer to Question #96608 in Macroeconomics for pfunzo mmatshela

Question

For the case of a more developed economy in Africa (e.g. South Africa), with relevant economic data on current trends, discuss the possible implications or impacts post 2020 of the ACFTA on the following variables: a) National consumption within South Africa
b) Investment by local stakeholders into the continent
c) Net exports
d) Government trade revenues
e) Potential employment effects within the country and on the continent

Answer 1

The implementation of AfCFTA is meant to test the achievement of economic growth in African countries that will make people’s financial dreams and quality of lives into reality. Its impact is to remove tariffs on international trade and this will increase the net income by about $2.8 billion per year. These collaborations will increase trade which in turn generating better transport infrastructure. It will be easier for South Africa or other African nations to expand their operations across the world.

South Africa being a developed country will benefit more thus increasing their net exports. National consumption within South Africa will also increase because of the cheap manufacturing tools from other countries. Involvements by other countries like China and Europe will increase the rate of investments.  These investments will create employment opportunities in the continent. These activities will definably increase the government revenues.