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A recent IMF report said that a successful African free trade area implementation can lead to unlocking innumerable benefits for Africa, creating avenues for income, jobs, and economic and social empowerment.
A recent IMF report said that a successful African free trade area implementation can lead to unlocking innumerable benefits for Africa, creating avenues for income, jobs, and economic and social empowerment.
The paper prepared by the IMF staff examined the prospects for African trade integration in the global context and the debilitating climate crisis. It highlighted the risks of geopolitical fragmentation, technological progress, and the continent’s prospective demographic growth if the integration is put on the back burner. The report called for comprehensive reforms combined with the AfCFTA implementation. That can increase the median merchandise trade flow between African countries by 53 percent and with the rest of the world by 15%, the report said, adding that such a pace of development could raise the real per capita GDP of the median African country by over 10 percent.
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Trade reforms could help reduce extreme poverty by an additional 30–50 million people across the continent, the report indicated and extreme poverty by an additional 30–50 million people across the continent. Reaching such a growth dimension presupposes investment in physical and human capital, and a macroeconomic and business environment conducive to private sector-led growth. The report also called for a modernized social safety net that supports the most vulnerable. According to the report, the AfCFTA agreement entered into force in 2019, was not implemented effectively.
