The African Continental Free Trade Area (AfCFTA) was due to come into force on July 1, but that proved unworkable after the virus forced widespread border closures and halted talks between governments over the removal of tariffs. It may now begin operating from the start of 2021. The pandemic is expected to cost Africa up to $79 billion in lost economic output this year alone with the additional risk of millions of job losses. World Bank researchers estimated the trade deal would lift 30 million Africans out of extreme poverty and 68 million from moderate poverty by 2035. “In this context, a successful implementation of AfCFTA would be crucial,” a World Bank report said. “(It) is a major opportunity for Africa, but implementation will be a significant challenge. Lowering tariffs is only the first step.” Once in force, the AfCFTA will bring together 1.3 billion people across 55 countries with combined gross domestic product of $3.4 trillion. Full implementation could increase real income in Africa by 7%, or nearly $450 billion, mainly by reducing the cost of trade through the elimination of tariffs and red tape. Ivory Coast and Zimbabwe – countries with the highest costs of trade – could see income gains of 14%.
SOURCE: REUTERS AFRICA