Creating a single, continent-wide market for goods and services, business
and investment would reshape African economies. The implementation of
AfCFTA would be a huge step forward for Africa, demonstrating to the
world that it is emerging as a leader on the global trade agenda.

The African Continental Free Trade Area (AfCFTA) agreement will create
the largest free trade area in the world measured by the number of
countries participating. The pact connects 1.3 billion people across 55
countries with a combined gross domestic product (GDP) valued at US$3.4 trillion.

The scope of AfCFTA is large. The agreement will reduce tariffs among member countries and cover policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and
technical barriers to trade. Full implementation of AfCFTA would reshape
markets and economies across the region and boost output in the services,
manufacturing and natural resources sectors.

As the global economy is in turmoil due to the COVID-19 pandemic,
creation of the vast AfCFTA regional market is a major opportunity to help
African countries diversify their exports, accelerate growth, and attract
foreign direct investment.

The African Continental Free Trade Agreement represents a
major opportunity for countries to boost growth, reduce poverty,
and broaden economic inclusion. Implementing AfCFTA would:

Lift 30 million Africans out of extreme poverty and boost the incomes
of nearly 68 million others who live on less than $5.50 a day;
1) Boost Africa’s income by $450 billion by 2035 (a gain of 7 percent)
while adding $76 billion to the income of the rest of the world. 
2) Increase Africa’s exports by $560 billion, mostly in manufacturing.

3) Spur larger wage gains for women (10.5 percent) than for men (9.9
percent).

4) Boost wages for both skilled and unskilled workers—10.3 percent for
unskilled workers, and 9.8 percent for skilled workers.

Under AfCFTA, extreme poverty would decline across the
continent—with the biggest improvements in countries with currently
high poverty rates.

West Africa would see the biggest decline in the number of people
living in extreme poverty—a decline of 12 million (more than a third of
the total for all of Africa). 
 Central Africa would see a decline of 9.3 million. 
 Eastern Africa would see a decline of 4.8 million. 
 Southern Africa would see a decline of 3.9 million. 
 Countries with the highest initial poverty rates would see the biggest
declines in poverty rates. 
 In Guinea-Bissau, the rate would decline from 37.9 percent
to 27.7 percent 
 In Mali, the rate would decline from 14.4 percent to 6.8 percent. 
 In Togo, it would decline from 24.1 percent to 16.9 percent.

Of the $450 billion in income gains from AfCFTA, $292 billion would
come from stronger trade facilitation—measures to reduce red tape
and simplify customs procedures.

Tariff liberalization is important, but by itself, it would boost the
continent’s income by just 0.2 percent.
 Adding trade facilitation to the mix—including measures to reduce red
tape, simplify customs procedures, and make it easier for African
businesses to integrate into global supply chains—would boost the
income gains by $292 billion. 
 These gains will require major efforts by countries to reduce the
burden on businesses and traders to cross borders, quickly, safely,
and with minimal interference by officials.

Achieving the gains from AfCFTA is especially important due to the
COVID-19 pandemic, which is expected to cause up to $79 billion in
output losses in Africa in 2020 alone.

COVID-19 has caused major disruptions to trade across the
continent, including in critical goods such as medical supplies and
food. 

By increasing regional trade, lowering trade costs and streamlining
border procedures, full implementation of AfCFTA would help African
countries increase their resiliency in the face of future economic
shocks and help usher in the kinds of deep reforms that are
necessary to enhance long-term growth.