The African Continental Free Trade Area : Economic and Distributional Effects
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 will connect 1.3 billion people across 55 countries with a combined GDP valued at $3.4 trillion. It has the potential to li...
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| Language: | English |
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Washington, DC: World Bank
2020
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| Online Access: | https://documents.worldbank.org/en/publication/documents-reports/documentdetail/216831595998182418/the-african-continental-free-trade-area-economic-and-distributional-effects http://hdl.handle.net/10986/34139 |
| Summary: | 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 will connect 1.3 billion people across
55 countries with a combined GDP valued at $3.4 trillion. It has the potential
to lift 30 million people out of extreme poverty by 2035. But achieving its full
potential will depend on putting in place significant policy reforms and trade
facilitation measures.
The scope of the agreement is considerable. It 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. It will complement existing subregional economic communities and
trade agreements by offering a continent-wide regulatory framework and by
regulating policy areas—such as investment and intellectual property rights
protection—that have not been covered in most subregional agreements.
The African Continental Free Trade Area: Economic and Distributional
Effects quantifies the long-term implications of the agreement for growth,
trade, poverty reduction, and employment. Its analysis goes beyond that in
previous studies that have largely focused on tariff and nontariff barriers in
goods—by including the effects of services and trade facilitation measures,
as well as the distributional impacts on poverty, employment, and wages
of female and male workers. It is designed to guide policy makers as they
develop and implement the extensive range of reforms needed to realize
the substantial rewards that the agreement offers. The analysis shows that
full implementation of AfCFTA could boost income by 7 percent, or nearly
$450 billion, in 2014 prices and market exchange rates. The agreement would
also significantly expand African trade—particularly intraregional trade in
manufacturing. In addition, it would increase employment opportunities and
wages for unskilled workers and help close the wage gap between men and
women. |
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