Central Africa stands to benefit the most from the African Continental Free Trade Area (AfCFTA), according to data from the African Development Bank (AfDB)
Hanan Morsy, director of research at the AfDB, revealed that the findings at the launch of one of the Bank’s flagship report in Malabo, where the AfDB is hosting its annual meetings.
Central Africa’s real income could increase by as much as seven per cent in one of the scenarios that researchers describe in the 2019 African Economic Outlook. By the same calculations, East Africa, the star performer on the continent, would experience an increase of around 4.2 per cent, followed closely by North Africa.
The scenarios measure the potential outcomes of the AfCFTA, ranging from one (least impact) to four (greatest impact).
“While there are differences in gains, all African countries are better off with regional integration than without,” Morsy added.
Morsy added that the levels of growth were not adequate to generate jobs for millions of unemployed Africans, but regional integration could stimulate the growth needed to make a dent in unemployment. Africa needed to grow between four per cent and six per cent in order to turn the tide.
The Outlook predicts that Africa can add 4.5 per cent to its GDP, provided that governments do away with bilateral tariffs and non-tariff barriers and keep rules of origin simple.
The launch included a panel discussion by Finance and Economic Planning Ministers, who are also Governors of the Bank.
Aïchatou Kané from Niger said the Economic Community of West African States, ECOWAS, was in the “fast lane” of integration and planned to have its own currency in 12 months.
Kané’s comments were echoed by Burkina Faso, Zimbabwe, and Tanzania who all agreed that integration would help the continent remain relevant as a global economic player.
The AfCFTA will constitute the world’s largest free trade area, consolidating an integrated market of 1.3bn consumers with a combined gross domestic product (GDP) of about US$3.3 trillion. It is estimated that Africa’s GDP growth could reach six per cent a year with a borderless continent (UNECA).
The four-day Annual Meetings are being hosted in Malabo, the capital of Equatorial Guinea. More than 2,000 ministers, government officials, development partners and civil society representatives have gathered in the island capital to discuss Africa’s development agenda.
