The African Continental Free Trade Area (AfCFTA) will increase intra-regional trade by 35% in the period up to 2045, projected the United Nations (UN).
In this regard, the United Nations Economic Commission for Africa (ECA) and the Center for International Research and Economic Modeling (CIREM) of the Center d’Etudes Prospectives et d’Information Internationales (CEPII) published a comprehensive assessment of the economic implications of the AfCFTA for Africa.
The study estimated that intra-African trade in 2045 under the AfCFTA would be about 35% higher than in the absence of the AfCFTA.
In addition, it is estimated that the largest increase in intra-African trade will occur in the agri-food, manufacturing and services sectors, with around 40% each.
Effective implementation of the AfCFTA is also expected to help Africa industrialize and diversify beyond energy and mining, contributing to increases in GDP and well-being.
To achieve the benefits of the AfCFTA reforms, all African Union member states must sign and ratify the AfCFTA Agreement and rapidly develop national AfCFTA implementation strategies with clear action plans and roadmaps.
Likewise, all actors, in particular the private sector, must be fully involved in the implementation of the AfCFTA reforms, with the support of governments, so that the AfCFTA can effectively deliver on its promises.
Mega-regional trade agreements (RTAs) can change global trade flows. As of the entry into force of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TIPAT) on December 30, 2018, the trend of the mega-RTA continues, that is, an RTA of significant economic size.
On May 30, 2019, the AfCFTA entered into force and trade under the Agreement officially began on January 1, 2021.
As of January 31, 2022, 54 of the 55 member states of the African Union have signed and 41 member states have deposited their instruments of ratification with the African Union.
However, as of January 12, 2022, the Agreement had not been notified to the World Trade Organization (WTO).
On January 1, 2022, the Regional Comprehensive Economic Partnership (RCEP) between 15 Asia-Pacific countries, including China, the Republic of Korea, and Japan, entered into force. Nor has it been notified to the WTO. The RCEP, which covers a third of global GDP, is expected to increase intra-RCEP trade by $40 billion or 2 percent.