This article was first published on African Business on 11 July 2022
In 2020 a World Bank report estimated that the AfCFTA had the potential to raise income on the continent by 7% by 2035 and lift 40m people out of extreme poverty, mainly by spurring intraregional trade.
The new report builds on the earlier study by adding potential gains arising from greater flows of FDI under two possible scenarios – the “AfCFTA FDI broad scenario” and the “AfCFTA FDI deep scenario”.
The broad scenario incorporates the expected benefits of increased FDI resulting from the reforms to trade in goods and services. The deep scenario examines the additional gains that could result from expanding the agreement to harmonising policies on investment, competition, e-commerce, and intellectual property rights.
“Full implementation of the African Continental Free Trade Agreement (AfCFTA) could increase FDI by up to 159%. with positive impacts for trade and incomes”.