Recently published – a World Bank report (pdf) on the economic and distributional impacts of the Africa Continental Free Trade Area.

Full implementation of the AfCFTA will have the following impacts:

• real income gains (across the continent) will increase by 7% by 2035. These will result mainly from reduction in non-tariff barriers (NTBs) and the implementation of a trade facilitation agreement.
• there will be a significant boost in African trade, in particular, an increase in intra-regional trade in manufacturing;
• the short-term impact on tax revenues is likely to be small, for most countries.

The report also sees AfCFTA as the path to recovery (for Africa) from the economic ravages of covid-19.

A few notes of caution, though. The report signals the risk that, by not capturing certain factors, it may actually be underestimating the impacts of AfCFTA. The omitted factors include informal trade flows, dynamic gains from trade, and foreign direct investment. By the same token, the omission of several other factors might indicate that the report may be overestimating the impacts of AfCFTA. These include the costs of lowering NTBs and of the trade facilitation agreement, plus certain transitional costs.

Also included in the report – a handy section comparing the AfCFTA provisions to those of the main regional agreements on the continent.

The main message from the report: the promise of the AfCFTA may, by and large, be quantified. It will bring benefits in the form of significant trade, economic prosperity, increased employment, and poverty alleviation. The report recognizes the challenge ahead in implementing the AfCFTA , but sees the expected gains as worth the effort.