By George Mwangi
An African trade pact could boost regional income by 7%, or $450 billion, speed up wage growth for women, and lift 30 million people out of extreme poverty by 2035, the World Bank said Monday.
The African Continental Free Trade Area, or AfCFTA, ratification on July 1 was postponed indefinitely due to the coronavirus pandemic.
The report suggests that achieving these gains will be particularly important given the economic damage caused by the coronavirus pandemic, which is expected to cause up to $79 billion in output losses in Africa in 2020.
Tariff liberalization accompanied by a reduction in non-tariff barriers, such as quotas and rules of origin, would boost income by 2.4%, or about $153 billion, the bank said.
While $292 billion would come from trade-facilitation measures that reduce red tape, lower compliance costs for businesses engaged in trade, and make it easier for African businesses to integrate into global supply chains, the bank said.
"The African Continental Free Trade Area has the potential to increase employment opportunities and incomes, helping to expand opportunities for all Africans," said Albert Zeufack, the World Bank's chief economist for Africa. "The AfCFTA is expected to lift around 68 million people out of moderate poverty and make African countries more competitive."
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