African trade deal could lift millions out of poverty

Mine workers wearing face masks looks on at the end of their shift, amid a nationwide coronavirus disease (COVID-19) lockdown, at a mine of Sibanye-Stillwater company in Carletonville, South Africa. (Reuters)
Short Url
Updated 28 July 2020

African trade deal could lift millions out of poverty

  • Once in force, the AfCFTA will bring together 1.3 billion people across 55 countries with combined GDP of $3.4 trillion

JOHANNESBURG: A pandemic-delayed African free trade deal, if fully implemented, could boost incomes across the continent, pull millions out of poverty and cushion against the negative fallout from COVID-19, the World Bank wrote in a report on Monday.

The African Continental Free Trade Area (AfCFTA) was due to come into force on July 1, but that proved unworkable after the virus forced widespread border closures and halted talks between governments over the removal of tariffs.

It may now begin operating from the start of 2021.

The pandemic is expected to cost Africa up to $79 billion in lost economic output this year alone with the additional risk of millions of job losses.

“In this context, a successful implementation of AfCFTA would be crucial,” the report said. “(It) is a major opportunity for Africa, but implementation will be a significant challenge. Lowering tariffs is only the first step.”

Once in force, the AfCFTA will bring together 1.3 billion people across 55 countries with combined GDP of $3.4 trillion.

World Bank researchers estimated the trade deal would lift 30 million Africans out of extreme poverty and 68 million from moderate poverty by 2035.

Full implementation could increase real income in Africa by 7 percent, or nearly $450 billion, mainly by reducing the cost of trade through the elimination of tariffs and red tape.

Ivory Coast and Zimbabwe — countries with the highest costs of trade — could see income gains of 14 percent.

The volume of total exports would increase by almost 29 percent, according to the World Bank, with exports between African nations rising 81 percent. 

Exports to non-African countries would increase 19 percent.

“The report estimates that compared with a business-as-usual scenario, implementing AfCFTA would lead to an almost 10 percent increase in wages, with larger gains for unskilled workers and women,” the report said.


Dubai launches economic program for post COVID-19 recovery 

Updated 05 August 2020

Dubai launches economic program for post COVID-19 recovery 

  • “The Great Economic Reset Programme” is part of a “COVID Exit initiative” to help the recovery and reshaping of the economy
  • The economic program will feature analyses of current and future policies

DUBAI: Dubai launched an economic program as part of its efforts to reshape the emirate’s economy for a “sustainable” and “resilient” future post the coronavirus pandemic, the government said. 
The Dubai government partnered with the Mohammed bin Rashid School of Government (MBRSG) to launch “The Great Economic Reset Programme” as part of a “COVID Exit initiative” to help the recovery and reshaping of the economy, state news agency WAM reported on Tuesday. 
The economic program will feature analyses of current and future policies, research and extensive stakeholder consultation to set the direction and tone of future economic policies, regulations and initiatives.
The government plans to use local and international experts for economies and societies to create growth strategies for the Dubai economy.
The MBRSG held a “Virtual Policy Council,” with global experts and thought leaders to discuss the impacts of COVID-19 on the economy and potential policy responses and initiatives. 
Chief economists, senior practitioners and researchers from leading global institutions including the World Bank, joined experts from Dubai Economy and the MBRSG at the first roundtable.
“I believe the triple helix collaboration between public, private and academia stakeholders have always produced the best solutions in the past. In the highly uncertain environment now, extensive collaboration and cooperation between all stakeholders are vital to our future prosperity. The Virtual Policy Council will propose the best approaches Dubai and the UAE can adopt to address the risks and opportunities in the next normal economy,” said Mohammed Shael Al-Saadi, CEO of the Corporate Strategic Affairs sector in Dubai Economy.
“This Virtual Policy Council is a key component of the whole process where global experts and thinkers share their views on the future economy. In this new era, the role of governments in enabling the new economic actors is becoming increasingly central, and Dubai is well-positioned to lead the way with innovative models of growth post COVID19,” said Professor Raed Awamleh, Dean of MBRSG.
The roundtable also discussed the impact of the pandemic on international trade, foreign investment and tourism, as well as the rise of digital globalization.