Poverty, in the simplest sense of the word, is a state where one lacks access to basic needs such as food, clothing and shelter. It is also used to describe a person whose living conditions prevent them from being able to acquire education, seek medical help, secure a stable job, and participate in recreational activities due to a lack of money.

Torrid as that may sound, poverty is an everyday reality as in 2021 an estimated 698 million people, or 9% of the global population, are living in extreme poverty – that is, living on less than $1.90 a day. Over one-fifth of the global population live below the higher $3.20 poverty line (1,803 million people), and over two-fifths (3,293 million people) live below $5.50 a day. (According to World Bank Stats)

For 26 countries in sub-Saharan Africa, the number of people living in extreme poverty has increased between 2010 and 2020.The largest increases have occurred in Angola (9.4 million), the Democratic Republic of the Congo (8.8 million) and South Sudan (7 million). In 2021, 66% of the global population living in extreme poverty live in countries in sub-Saharan Africa.

The creation of the African trade block is believed to be the much needed panacea to the challenge that African countries continue to face- the ugly and cancerous poverty

Ratified and set in motion in January of 2021, the African Continental Free Trade Area (AfCFTA) has the potential to unlock ginormous economic value for the continent. The pact creates a continent-wide market; embracing 55 countries with 1,3 billion people and a combined GDP of US$3,4 trillion.

The findings of a new World Bank report carried out in partnership with the AfCFTA Secretariat reveals that AfCFTA has the potential to bring significant economic and social synergies to Africa which will translate to poverty alleviation, increased incomes and accelerated economic growth.

If AfCFTA’s goals are fully realised, 50 million people could escape extreme poverty by 2035, and raise incomes by 8%, or $450 billion, by 2035, and the number of people living in extreme poverty would fall by 45 million.

When fully enforced, the AfCFTA would boost the continent’s income by 8% to about US$571 billion. The report adds that the pact could create almost 18 million better-quality jobs with women workers seeing the biggest gains. Under deep integration, Africa’s exports to the rest of the world would go up by 32% by 2035, and intra-African exports would grow by 109%, led by manufactured goods.

The AfCFTA promises to eliminate tariffs on 90% of goods and reduce barriers to trade in services according to the new report. It adds that AfCFTA will boost the continent’s ability to attract investment — both from within Africa and outside. FDI is important because it brings the fresh capital, technology, and skills so badly needed to raise living standards and reduce Africa’s dependence on volatile commodity exports.

The report also notes that greater FDI could raise Africa’s exports to 32% by 2035, with intra-African exports growing, especially in the manufactured goods sectors. Inflows of FDI attracted by the AfCFTA would bring jobs and expertise, build local capacity and forge connections that can help African companies join regional and global value chains.

Much as there are all these possibilities, deliberate cohesive moves are required to make this vision a reality. It is imperative to harmonise policies on investment, competition, e-commerce, and intellectual property rights.

Deeper integration in these areas would help build fair and efficient markets, improve competitiveness, and attract even more FDI by reducing the risks of shifting regulations and policies.

To maximise its benefits, the first step will be to conclude planned negotiations on investment, e-commerce and intellectual property.

The report also recommends building grassroot support for and understanding of the agreement, simplifying red tape to encourage investment, and pairing the deal with a “complementary agenda” that includes training and advice for national trade ministries charged with supervising compliance and administration.

To make the most of the AfCFTA, African governments should conclude talks as planned and ensure the agreement covers investment and competition policy, intellectual property rights and e-commerce.

African governments should seek to build broad public support for AfCFTA and help businesses benefit from its provisions.