Ensuring the success of the AfCFTA - Issues for urgent consideration

The AfCFTA has the potential to generate USD 3.4 trillion in GDP and lift over 100 million people out of poverty by 2040, with primary gains expected in manufacturing and services. However, significant disparities in factor markets—including labour skills, technology adoption, and financial capacity—exist across the continent, with Eastern and Southern Africa generally possessing higher capacities than Central and Western Africa. The document highlights risks associated with heavy reliance on non-African financing, such as the EU-funded Africa Trade Observatory, and urges member states to leverage domestic capital markets and sovereign wealth funds. It further emphasizes that political stability and the empowerment of regional bodies are essential to protect private sector investment in cross-border infrastructure, which the World Bank estimates requires USD 47.6 billion annually.

• The AfCFTA is projected to have significant economic impacts by 2040, including a GDP increase of USD 3.4 trillion, a 7 percent rise in real incomes, and the removal of more than 100 million people from poverty, primarily driven by the services and manufacturing sectors.
• There are stark regional disparities in the capacity to manufacture value-added goods; Eastern and Southern Africa possess superior labour, finance, technology, and infrastructure compared to Central and Western Africa.
• Manufacturing export capacities vary widely by country, with Botswana (90.1%), Central African Republic (76.14%), and Mauritius (66.03%) showing high rates, while Angola (1.25%), Mozambique (1.97%), and Nigeria (6.69%) show relatively low rates.
• Political instability is a major barrier to policy consistency and capital formation, with only 8 of 54 African countries identified as stable and not vulnerable to terrorism, politically motivated violence, or sudden government changes in the World Bank's 2020 index.
• The AfCFTA faces a risk of diminished ownership due to heavy reliance on external funding; for example, the Africa Trade Observatory is financed by the EU with 9.5 million euros and managed by the International Trade Centre.
• Financial commitment from member states is lagging, as only 16 of the 25 countries that ratified the Agreement and committed to the Kigali Decision have implemented the mandatory 0.2% levy on eligible imports.
• To support cross-border trade, the World Bank estimates an annual infrastructure cost of USD 47.6 billion in energy and transport.

APA

Stephenson, P. (2021). Ensuring the success of the AfCFTA - Issues for urgent consideration. Africa Policy Research Institute. https://afripoli.org/ensuring-the-success-of-the-afcfta-issues-for-urgent-consideration

Chicago

Stephenson, Patrick. Ensuring the success of the AfCFTA - Issues for urgent consideration. Africa Policy Research Institute, 2021. https://afripoli.org/ensuring-the-success-of-the-afcfta-issues-for-urgent-consideration.

Wikipedia

{{cite report |last1=Stephenson |first1=Patrick |title=Ensuring the success of the AfCFTA - Issues for urgent consideration |publisher=Africa Policy Research Institute |date=28 December 2021 |url=https://afripoli.org/ensuring-the-success-of-the-afcfta-issues-for-urgent-consideration |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{stephenson2021ensuring, author = {Stephenson, Patrick}, title = {{Ensuring the success of the AfCFTA - Issues for urgent consideration}}, institution = {Africa Policy Research Institute}, year = {2021}, month = dec, url = {https://afripoli.org/ensuring-the-success-of-the-afcfta-issues-for-urgent-consideration}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }