According to a World Bank report, Côte d'Ivoire could be the biggest beneficiary of the AfCFTA, with a 14% increase in revenues, ahead of countries such as Nigeria and South Africa (+4%). Overall, the continent's revenues could jump by $450 billion by 2035.
Côte d'Ivoire could be the country to benefit most from the AfCFTA. This is what the World Bank said this week in a report entitled “The African Continental Free Trade Area: Economic and Distributional Effects”.
According to the institution, Côte d'Ivoire has one of the highest trade costs in Africa. Thanks to the implementation of the AfCFTA, it would see its revenues jump by 14%, the highest increase predicted by the institution for any African country, followed by Zimbabwe (almost 12%). The continent's two largest economies, Nigeria and South Africa, should see their revenues increase by only 4%.
The AfCFTA, which came into force last year, has been touted for several years as the future lever for African trade integration. According to the World Bank's scenario, this area could have financial, economic and social impacts for the whole continent.
According to the report, if the implementation of the AfCFTA is accompanied by significant policy reforms and trade facilitation measures, it could increase African countries' revenues by $450 billion and lift 30 million people out of extreme poverty by 2035. While intra-continental trade currently accounts for only 15% of Africa's total trade (one of the lowest ratios in the world), intra-continental exports are set to jump by 81%, while those to non-African countries would increase by 19%.
Furthermore, while the planned reduction in tariffs has raised concerns among countries reliant on them, the study estimates that short-term tariff revenue would decrease by only about 1.5% or less for 49 of the 54 countries, while total tax revenue is expected to decline by less than 0.3% in 50 countries.
According to the World Bank, this is because "only a small portion of tariff revenue comes from imports originating in African countries (less than 10% on average)" and also because "exclusion lists can protect most tariff revenues from liberalization since these revenues are heavily concentrated in a few tariff lines."
To recall, the AfCFTA, whose agreement was signed by all African Union member countries, aims to create the world's largest free trade area by landmass, encompassing a potential market of 1.2 billion people and a combined GDP of $2.5 trillion. Initially scheduled to become operational on 1 July of this year, its launch had to be postponed due to the COVID-19 pandemic. Implementation is now planned for 2021.