A Comparative Analysis of the Effects of the African Continental Free Trade Agreement on the Economic Impacts of COVID-19 in North and Southern Africa

Abstract

COVID-19 has forced many governments to take emergency health measures which are undermining productive capacities and disrupting global supply chains. Southern and Northern Africa have been heavily impacted by such measures. According to UNCTAD statistics (2021), the average annual growth rate of exports in Northern and Southern Africa fell by 27.61% and 6.96%, respectively in 2020. Yet, the effective operationalization of the African Continental Free Trade Agreement (AfCFTA) could have limited some of the pandemic’s economic impacts. Using a computable general equilibrium model, this paper first analyzes the pandemic’s economic impact and then assesses the ability of the AfCFTA to mitigate the economic impacts of COVID-19. The simulation results show that the AfCFTA would mitigate the economic impact in Southern and Northern Africa. It reduces the decline in intra-regional exports by 7.87 percentage points in 2021. The study emphasizes the need to remove non-tariff barriers to amplify potential positive effects.