The African Continental Free Trade Area (AfCFTA) provides an opportunity for African countries to diversify and transform their economies by addressing liberalisation of tariffs, removal of non-tariff barriers, and implementation of trade facilitation measures. For Rwanda, implementation of the agreement is estimated to lead to an increase in real incomes by 3.2%, intra-Africa exports by 38% and intra-Africa imports by 35% by 2035.

However, the reduction of tariffs could lead to a decrease in tariff revenue of 15.3%, which can be offset by an increase in value-added tax, excise duties and the AfCFTA Adjustment Fund. But more importantly, by placing gold, the main driver of the tariff revenue loss, amongst the lists of sensitive products. The AfCFTA will also help Rwanda expand its exports to key markets like South Africa, Nigeria, Morocco, and Ghana which would increase export revenue. Furthermore, as the agreement addresses climate change, gender equality, and poverty alleviation, it would foster more inclusive and sustainable trade in the country. 

Report by the Overseas Development Institute