Making the Most of the African Continental Free Trade Area

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dc.contributor.authorEchandi, Roberto
dc.contributor.authorMaliszewska, Maryla
dc.contributor.authorSteenbergen, Victor
dc.date.accessioned2022-11-16T14:27:22Z
dc.date.available2022-11-16T14:27:22Z
dc.date.issued2022-06-30
dc.description.abstractThe creation of the African Continental Free Trade Area (AfCFTA) provides a unique opportunity to boost growth, cut poverty, and reduce Africa’s dependence on the boom and-bust commodity cycle. A World Bank (2020) report estimates that the AfCFTA has the potential to raise income in the continent by 7 percent by 2035 and lift 40 million people out of extreme poverty, mainly by spurring intraregional trade (termed the “AfCFTA trade scenario” for purposes of this analysis). Reductions in nontariff barriers on goods and services and improvements in trade facilitation measures will account for about two thirds of the US$450 billion in potential income gains by removing long delays across most of the continent’s borders and lowering compliance costs in trade, making it easier for African businesses to become integrated into regional and global supply chains. This report builds on that earlier study by including potential gains arising from greater flows of foreign direct investment (FDI), termed the “AfCFTA FDI broadscenario,” and from deeper integration beyond trade, the “AfCFTA FDI deep scenario.” FDI has traditionally been low in Africa. The AfCFTA is likely to attract cross-border investment by eliminating tariff and nontariff barriers and replacing the existing patchwork of bilateral and regional trade deals with a single, unified market. Investors in any one of 55 member countries will have access to a continent of 1.3 billion people with a combined GDP of US$3.4 trillion. Integration in global and regional value chains offers a further magnet for FDI and the jobs, investment, and know-how that FDI brings.en_US
dc.identifier.urihttp://hdl.handle.net/10986/37623
dc.language.isoenen_US
dc.publisherWorld Bank, Washington, DCen_US
dc.rights.holderWorld Bank
dc.rights.urihttp://creativecommons.org/licenses/by/3.0/igo
dc.subjecttrade and growthen_US
dc.subjecttrade and foreign direct investmenten_US
dc.subjectintraregional tradeen_US
dc.subjectterms of tradeen_US
dc.subjectregional value chainen_US
dc.titleMaking the Most of the African Continental Free Trade Areaen_US
dc.title.alternativeLeveraging Trade and Foreign Direct Investment to Boost Growth and Reduce Povertyen_US
dc.typeBooken_US

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