Africa destined to be the largest market in the world by 2050 – Trade Minister

Trade and Industry Minister Alan Kwadwo Kyerematen says Africa is destined to be the largest consumer market in the world by 2050, urging all businesses to take advantage of the market by trading among ourselves.

“Whether we like it or not Africa is destined by 2050 to become the largest consumer market in the whole world,” he said.

He made these comments when he spoke at the 2017 African Prosperity Conference on the theme “The Continental Free Trade Area (CFTA) – Exploring Possibilities for Business Engagement across Africa” at the Kempinski Hotel Gold Coast City in Accra on September 12.

The two-day conference on CFTA which ends on the 13th of September 2017 is organised by the Pan African Chamber of Commerce and Industry and hosted by the Ghana National Chamber of Commerce and Industry. It's being supported by the African Union and the United Nations Economic Commission for Africa.

For this to be achieved, the Trade and Industry Minister said three things need to be considered and that is by first looking at the population size, the purchasing power of the population and the propensity to consume.

According to him, these factors will determine the rate at which Africa will be the largest market in the world by 2050 because it has the fastest growing middle class on the continent.

In his explanation, he said since Africa is the fastest growing continent, the purchasing power of the middle class becomes high, the propensity for them to consume increases thereby making Africa the largest consumer market by 2050.

“I say this for a number of reasons; when we talk about market size we are basically looking at three things. First is population size, second is the purchasing power of the population and the propensity to consume. If you combine all these three factors and you look at our circumstances in Africa, you would appreciate why I’m saying this”.

“We also know that markets are not just about population; about people that’s why I talk about purchasing power. Now purchasing power comes from the growth that you have in your middle class and because Africa is the fastest growing continent, we also have the fastest growing middle class. So when I talk about purchasing power, you must appreciate why I’m talking about Africa becoming the largest consumer market,” he stated.

He, therefore, urged all businesses in the country and in Africa to take advantage of the regional market by trading among themselves, producing what is being consumed and consuming what is being produced.

The Continental Free Trade Agreement (CFTA) is a key African initiative aiming to urgently take forward the continent’s long-standing integration and development agenda. The CFTA represents a significant opportunity to redress the vulnerabilities of Africa’s economies within the global economic order that have been manifest in and deepened by the imbalances of the World Trade Organisation as well as other multilateral and bilateral trade agreements.

The African Union Commission (AUC) estimates that if coupled with complementary trade facilitation measures to boost the speed and reduce the cost of customs procedures and port handling, the CFTA could more than double the share of intra-African trade to 22 percent of total trade by 2022. This would be immensely significant for a continent whose intraregional trade, at approximately 12%, is significantly lower than the intra-regional trade that takes place in Asia, Latin America, or Europe. It would also be a counterbalance of Africa’s 4% share of global trade.