The UN Economic Commission for Africa (Uneca) has identified the African Continental Free Trade Area (AfCFTA) as a critical tool for African nations to navigate economic challenges stemming from the Russia-Ukraine conflict, which has disrupted supply chains and driven up food and energy prices across the continent.
Intra-Africa Trade ¶
Uneca's analysis projects that full AfCFTA implementation could increase intra-Africa trade by 35% by 2045 compared to a scenario without the agreement. The report emphasizes that the pact would enable Africa to diversify its economy, reduce reliance on external trade partners, and elevate intra-Africa trade from 15% to over 26% of total trade volumes.
Kenyas ratification of AfCFTA in 2018 marked a pivotal step for eastern Africa, positioning the country as a regional leader in the initiative. The trade zone, which unites 1.3 billion people in a $3.4 trillion economic bloc, aims to enhance living standards and reduce dependency on global markets.
Cut Tariffs on Goods ¶
Recent negotiations on AfCFTA rules of origin are expected to significantly lower tariffs on cross-border goods. However, the agreement's official launch on January 1, 2021, was delayed due to unresolved technical challenges in defining eligible products for preferential tariffs.
Uneca's report 'Addressing Poverty and Vulnerability in Africa during the Covid-19 Pandemic' reveals that the crisis has exacerbated poverty levels, with 12.6% more people at risk of falling into extreme poverty in a single year—surpassing the total increase since 1999. The study underscores the pandemic's role in reversing decades of poverty reduction progress.
People in Extreme Poverty ¶
Dr. Hanan Morsy, Uneca's deputy executive secretary, noted that the report highlights Africa's unique vulnerability to global shocks. 'The pandemic has reversed hard-won gains in poverty reduction,' she stated, emphasizing the need for resilient economic frameworks like AfCFTA to safeguard development.
