AfCFTA Implementation Expected to Propel Africa's Economic Growth, Says ECA

Addis Ababa April 18/2024 (ENA)  The implementation of the African Continental Free Trade Area (AfCFTA) is set to drive significant economic growth in Africa, particularly in intra-African trade, the United Nations Under-Secretary-General and Executive Secretary of the United Nations Economic Commission for Africa (ECA), Claver Gatete said.

The research findings indicate that the most impressive economic benefits stemming from the implementation of the AfCFTA are anticipated to arise from increased intra-African trade.

In relative terms, overall intra-African trade is projected to grow by approximately 35 percent. Specifically, trade in agri-food, services, and industry within Africa is expected to experience growth rates of 50.2 percent, 37.6 percent, and 36.1 percent, respectively, by 2045 compared to a scenario without the agreement.

During his keynote speech at the Brookings Event Claver Gatete said Intra-African trade in energy and mining sectors is also predicted to increase by 19 percent, albeit at a lower rate than other key sectors.

To meet the transport and logistics requirements of the AfCFTA, the research highlights the need for around 500 billion USD in investment by 2030. However, the implementation process is expected to stimulate infrastructure investments in transport corridors, potentially boosting intra-African trade in transport services by up to 25 percent, he elaborated.

Gatete highlighted that the AfCFTA aims to replace the multitude of small and fragmented national markets in Africa with a single continent-wide marketplace. This consolidation into one market of 1.4 billion people with a collective spending power close to 3 trillion USD is expected to attract foreign direct investment and enhance consistent and predictable policy environments, leading to economic growth and job creation.

The research findings indicate that the AfCFTA has the potential to transform African economies, with consensus among various researchers and think tanks, including the World Bank and the International Monetary Fund (IMF), on its positive impact.

Forty-seven countries, representing 95 percent of Africa's GDP, 91 percent of the population, and 96 percent of total intra-African trade, have ratified the agreement. Phase I protocols on trade in goods, trade in services, and dispute settlement have already entered into force, while Phase II protocols on investment, competition policy, intellectual property rights, digital trade, and women and youth in trade are currently being negotiated, it was learned.

By fostering regional value chains and improving economies of scale, the AfCFTA is expected to contribute to the achievement of Agenda 2063 and the Sustainable Development Goals (SDGs), while also positioning Africa as a global force for good.

As Africa continues its progress in implementing the AfCFTA, the focus now shifts to practical and innovative approaches to expedite the process and enable countries to leapfrog their development.