World Bank: AfCFTA to boost Africa’s income by $450b

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World Bank

The African Continental Free Trade Area (AfCFTA) will attract over $450 billion income to African economies, the World Bank report has shown.

According to the report, the AfCFTA represents a major opportunity for countries to boost growth, reduce poverty, and broaden economic inclusion, a World Bank report has found.

“If implemented fully, the trade pact could boost regional income by seven per cent or $450 billion, speed up wage growth for women, and lift 30 million people out of extreme poverty by 2035,” it said.

The report suggests that achieving these gains will be particularly important given the economic damage caused by the coronavirus (COVID-19) pandemic, expected to cause up to $79 billion in output losses in Africa in 2020.

The pandemic has caused major disruptions to trade across the continent, including in critical goods, such as medical supplies and food.

Continuing, it said most of AfCFTA’s income gains are likely to come from measures that cut red tape and simplify customs procedures.

Also, tariff liberalisation accompanied by a reduction in non-tariff barrier, such as quotas and rules of origin, would boost income by 2.4 per cent, or about $153 billion.

The  balance 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.

Other stakeholders see the AfCFTA as  a policy to accelerate regional and economic integration in Africa.

The implementation of the AFCFTA is expected to help the continent have control of its economic future even as the  United Nations Economic Commission for Africa forecasts African Gross Domestic Product would decline by 3.2 per cent to -2.8 per cent in 2020 due to the effects of the COVID-19 pandemic hence the need to boost trade on the continent.

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