How the African Union is helping Africa’s economy

By: ARUNIMA SIRCAR


posted on: June 28th, 2018

THE AFRICAN UNION’S ECONOMIC OUTLOOK

The African Economic Community (AEC) is an organization under the African Union that exists to govern the economic interactions that take place within the AU. It aims to create economic stability and promote economic growth and development. This is being done through the efforts of creating a central bank, a single market for exports and imports, various free trade areas to promote free trade and a common currency. By doing this, the AEC hopes to establish an economic union. Currently, the AEC consists of many regional blocs, many of which have overlapping membership. It is these regional economic communities that are the basis for African economic integration not just between the member nations but also with the rest of the world.

ECONOMIC GROWTH WITH THE AU

Africa’s economic growth is expected to increase to 3.7% in 2019. It can also be noted that the growth of the economy in Africa had overtaken economic growth in East Asia, a huge accomplishment for the AU. With improvements in language skills, technology, labour skill level, allocation of resources and expansions in trade, the economy is expected to improve in its performance greatly. It is expected that 128 million people by 2020 will have household incomes of more that $5000. This will also attract greater foreign direct investments leading to more economic growth, stronger infrastructure and a larger trade network between the AU and the rest of the world.

THE AU’S PLANS FOR ECONOMIC GROWTH

Through the AEC, the AU has a number of goals and aims that it wants to achieve in order for economic growth to take place. This includes creating more regional blocs in regions where this doesn’t exist so that their access to the market becomes easier. Along with this, they aim to create a free trade area within these different regional blocs. By creating a continent-wide market, trading within countries becomes a lot easier and by creating a continent-wide union, it will aid the economic policies in place. These long-term goals have been achieved by some regional blocs and not the others due to which despite being a rather old set of aims, they still need to fulfil uniformly in the continent.

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