“Greater trade openness would help countries adapt to climate change and strengthen food security, including by improving the availability and affordability of food supplies,” says the IMF report on Trade Integration in Africa – Unlocking the Continent’s Potential in a Changing World.
Add that "More diversified and broader trade would reduce the impact of disruptions to specific markets and products that could result in changes in global trade patterns."
Earlier this week, there were warnings that Africa could suffer a permanent economic hit if tensions split the global economy into opposing trading blocs around the US and China.
estimating that sub-Saharan Africa could see a 4% decline in GDP after 10 years under a severe version of this bipolar world.
To reap the full benefits of the AfCFTA, which could be the world's largest free-trade zone by area when the treaty is fully operational by 2030, major cuts in tariff and non-tariff trade barriers between African nations will be needed, the IMF said in the report.
“These reductions could increase the average flow of goods trade between African countries by 15% and average real GDP per capita by 1.25%,” or more, if combined with substantial improvements in the trading environment, the lender said.
The IMF also found that comprehensive reforms coupled with the implementation of the AfCFTA could increase the average flow of goods trade between African countries by 53% and the rest of the world by 15%.
This could increase average per capita GDP in Africa by more than 10% and lift up to 50 million people on the world's poorest continent out of extreme poverty by 2035, he said.
Policy actions recommended in the report include a modernized social safety net that supports the most vulnerable during the transition to a higher growth trajectory and investment in human capital.
