AfCFTA: updated analysis of trade, economic outcomes, and policy implications

Unlock the Future of African Trade and Economic Integration

The African Continental Free Trade Area (AfCFTA) represents a monumental step towards transforming Africa's economic landscape, fostering deeper integration, and reducing reliance on traditional external trading partners. This comprehensive and updated study, conducted by the European Union’s Joint Research Centre (JRC), provides invaluable insights into the potential impacts of this ambitious agreement. This study is a follow-up to an earlier study that was conducted by the JRC at the request of the Department of Agriculture, Rural Development, Blue Economy and Sustainable Environment (DARBE) of the African Union Commission (AUC).

The JRC developed this study within the Pan-African Network for economic Analysis of Policies (PANAP), established in 2019 under the aegis of the African Union (AU) - European Union (EU) partnership. PANAP is a network of academic, research and institutional partners developing research on agro-economics and policy issues. PANAP aims to strengthen the liaison between researchers/scientists and policymakers in Africa, and to stimulate their cooperation on selected topics linked to policy priorities that reinforce the stability of African agriculture and food sectors.

This interactive infographic complements the homonym scientific report with tools to explore freely data visualizations and to discover facts within the model results.

Link to the report: AfCFTA: Updated Analysis of Trade, Economic Outcomes, and Policy Implications

Link to the policy brief: The African Continental Free Trade Area: Unlocking Economic Potential

What You’ll Discover in This Report:

• Positive Economic Trajectories: Explore the detailed projections indicating positive economic outcomes for Africa, including increases in GDP, household disposable income, and a significant boost to intra-African trade.
• The Crucial Role of Non-Tariff Measures (NTMs): Understand why the reduction of NTMs is pivotal for achieving substantial economic benefits, with new analysis exploring spillover effects to extra-African trade that can further amplify these gains.
• A Path to Industrialization: Learn how the AfCFTA is expected to foster industrialization across the continent, with manufacturing output projected to show the most significant increases among all sectors.
• Regional Dynamics and Disparities: Gain a nuanced understanding of the varied economic benefits across different African regions and sectors, highlighting areas where targeted complementary policies may be necessary.
• Fiscal Implications: Examine the detailed analysis of potential shifts in public revenue streams, including the decrease in tariff revenues and the importance of increasing domestic tax income to maintain public spending and investment.
• Updated and Robust Analysis: This study leverages the advanced MAGNET model, based on GTAP version 7 and database version 11C, incorporating the latest actual tariff offers, refined NTM modeling, and updated baseline projections that account for recent global events.

Why This Report Matters:

As Africa's population is projected to reach 2.5 billion by 2050 and its share of the global economy is set to grow significantly, the AfCFTA is a critical driver of its future. This report offers essential evidence-based scientific support for European policymaking processes, enabling a more informed approach to maintaining and strengthening partnerships with a growing and integrating African continent.