The African Continental Free Trade Area (AfCFTA) has the potential to bring significant economic and social gains for the continent and lead to higher incomes, lower poverty, and accelerate economic growth, according to a new World Bank report done in partnership with the AfCFTA Secretariat.
If fully implemented, the AfCFTA could boost the continent’s income by as much as 9 percent—to $571 billion. The report adds that the pact has the potential to create almost 18 million better-quality jobs with women workers seeing the biggest gains. By 2035, the resulting jobs and income growth could help up to 50 million people exit extreme poverty. Africa has a market of more than 1.3 billion people with a combined GDP of US$3.4 trillion.
When fully implemented, the AfCFTA will eliminate tariffs on 90 percent of goods and reduce barriers to trade in services according to the new report. It adds that AfCFTA will boost the continent’s ability to attract investment – both from within Africa and outside.
The key findings from the report indicate that the AfCFTA has the potential to encourage greater foreign direct investment (FDI) required for Africa to diversify into new industries.
The report also notes that that greater FDI could raise Africa’s exports up to 32 percent by 2035, with intra-African exports growing by 109 percent, especially in the manufactured goods sectors.