Environmental Effects of the African Continental Free Trade Agreement: A Computable General Equilibrium Model Approach

Abstract

Africa is currently on the road to operationalizing its continental free trade area. The African Continental Free Trade Agreement (AfCFTA), which entered into force in May 2019, is the world's largest free trade area regarding the number of participating countries since the formation of the World Trade Organization. 1 The AfCFTA brings together 1.3 billion people with a combined Gross Domestic Product (GDP) valued at 2.5 trillion US dollars. The successful implementation of the AfCFTA is a concern for the African Union and the rest of the world, given the current political environment, which is gripped by trade tensions. 2 The agreement is set up to remove tariffs for 97% of all tariff lines and not less than 90% of all trade, aiming to allow free access for commodities, goods, and services across the continent. 3 The main objectives of the agreement are to create a single market, deepen the economic integration of the continent, achieve market liberalization, allow the movement of capital and people, and foster investment. In sum, the implementation of the agreement aims to achieve sustainable and inclusive socio-economic development.