According to a new World Bank analysis on the African Continental Free Trade Area (AfCFTA) agreement, Ghana’s intra-Africa exports may rise by 132% by 2035.
This is in addition to nations like Tunisia and Cameroon, whose intra-African trade is expected to rise by 165% and 144%, respectively.
According to the report, rising foreign direct investment (FDI) in Ghana and the continent as a whole will be the driving force behind the country’s anticipated increase in intra-African exports.
Regarding the continent, increasing FDI is anticipated to boost intra-Africa trade by 109 percent and exports to the rest of the world by 32% in 2035.
According to the World Bank’s new report, the AfCFTA had the potential to bring significant economic and social gains for the region, leading to higher incomes, lower poverty, and faster economic growth.
Asserting that, the AfCFTA, if fully implemented to harmonise investment and competition rules, the trade pact could boost regional incomes by as much as nine per cent—to $571 billion.
It could create almost 18 million more jobs, many of them higher-paying and better-quality jobs, with women workers seeing the biggest gains.
It said by 2035, the resulting jobs and income growth could help up to 50 million people exit extreme poverty.
The implementation of the trade agreement would also lead to larger wage gains for women and skilled workers.
Wages of female workers are expected to be 11.2 per cent higher in 2035 as compared to the wage level without the agreement, outpacing 9.8 per cent growth of male workers’ wages.
The report, Making the Most of the African Continental Free Trade Area, extends the work done in 2020 when the World Bank initially assessed the economic potential of AfCFTA.
As part of its first phase, which took effect in January 2021, the AfCFTA will gradually eliminate tariffs on 90 per cent of goods and reduce barriers to trade in services.
The new report examines the effects of the larger trade market on the continent’s ability to attract investment – both from within Africa and outside—and the resulting economic impact.
“The AfCFTA comes at a critical time when regional cooperation is needed to navigate compounded risks and enhance the resilience of supply chains, to support green, resilient and inclusive growth in Africa,” Mari Pangestu, Managing Director for Development Policy said.
“Countries must work together to make the AfCFTA a reality and reap its many benefits – including reducing barriers to trade and investment, enhancing competition, and ensuring markets function fairly and efficiently through clear and predictable rules,” he said.
