2023-05-18 20:29:48
The African Continental Free Trade Area (AfCFTA) is poised to become an engine of regional prosperity in Africa. This regional economic integration project has the potential to triple intra-African trade and increase GDP per capita by 10%, according to a study by the International Monetary Fund (IMF).
Intra-African trade is seen as a source of continent-wide growth and development. After many years of waiting, ZLECAF was officially launched in January 2021, thanks to the efforts of Nigerien Presidents Mahamadou Issoufou and Rwandan Presidents Paul Kagame. Once fully operational, the ZLECAF will create a market of 1.27 billion consumers, with a cumulative GDP estimated between 2.3 and 3.4 billion US dollars.
ZLECAF plays a key role in promoting regional prosperity. The IMF stresses that it is essential to invest in physical and human capital, to create a sound macroeconomic framework and to modernize social safety nets to support the most vulnerable populations during the transition phase.
Two years after its launch, a forward-looking IMF report provides optimistic perspectives on this major economic integration project in Africa. According to this report published on May 5, the implementation of ZLECAF should lead to a considerable increase in intra-African trade, from 17% currently to 53%. Moreover, the free trade area could boost the median flow of merchandise trade between African countries and the rest of the world by 15% and increase median real GDP per capita by more than 10%.
The IMF therefore recommends accelerating the implementation of the ZLECAF, which has so far been hampered by significant tariff and non-tariff barriers, a business climate that requires improvement in each member state, a lack of infrastructure commercial and security challenges. These sectors, if reformed, could improve the functioning of the AfCFTA and spur continent-wide economic growth.
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