A new World Bank report has disclosed that the African Continental Free Trade Area (AfCFTA) represents a major opportunity for countries in Africa to boost growth, reduce poverty, and broaden economic inclusion.
The report also revealed that if AfCTA pact is fully implemented , it could boost regional income by 7% or $450 billion, speed up wage growth for women, and lift 30 million people out of extreme poverty by 2035.
The report suggests that achieving these gains will be particularly important given the economic damage caused by the COVID-19 (coronavirus) pandemic, which is expected to cause up to $79 billion in output losses in Africa in 2020.
The pandemic has already caused major disruptions to trade across the continent, including in critical goods such as medical supplies and food.
The World Bank also revealed in the report that most of AfCFTA’s income gains are likely to come from measures that cut red tape and simplify customs procedures. ”
“Tariff liberalization accompanied by a reduction in non-tariff barriers—such as quotas and rules of origin—would boost income by 2.4 percent, or about $153 billion.
“The remainder—$292 billion—would come from trade-facilitation measures that reduce red tape, lower compliance costs for businesses engaged in trade, and make it easier for African businesses to integrate into global supply chains”, the report added.