African Continental Free Trade Area: A Diamond Factor Model Perspective

Abstract The formal signing of the African Continental Free Trade Area (AfCFTA) trade agreement presents one of the major milestones offering Africa another chance to re-write its development narrative. The chapter explores several thematic areas of the AfCFTA through Michael Porter’s Diamond Factor Model (DFM). This chapter uses the model to understand the competitive landscape of the member states. The framework helps us to identify specific challenges and opportunities in the continent. In this chapter, the authors further show the central role of governments across the bloc in enabling creation of comparative as well as competitive advantages of the respective nations as required by the model so as to unlock latent value in the member states. The authors also explore gender issues as well as the role of existing Regional Economic Communities (RECs) and potential challenges on overall competitiveness of the bloc. The authors recommend key interventions grounded on main tenets of Porter’s framework to enhance competitiveness of the member states.