Pardee's IFs Forecasts AfCFTA’s Transformative Potential for Africa’s Youth

By: Wara Irfan

Frederick S. Pardee Institute for International Futures, in collaboration with UNICEF Innocenti’s Global Office of Research and Foresight and the African Union Development Agency–NEPAD (AUDA‑NEPAD), has released a new foresight report titled Unlocking the Potential of AfCFTA for Africa’s Young Population, exploring how the African Continental Free Trade Area (AfCFTA) could transform outcomes for children and youth across Africa.   

Using the Pardee Institute’s International Futures (IFs) model, the report compares three scenarios: continuing current trade patterns without AfCFTA (referred to as the Current Path scenario), full AfCFTA implementation (AfCFTA scenario), and AfCFTA plus strategic reinvestment of trade revenues into education, welfare transfers, and research & development (R&D) (AfCFTA For Africa’s Young Population scenario). The report finds that a child-centered approach to the trade agreement is crucial for ensuring equitable and sustainable development in the region. 

Led by Pardee researchers Deva Sahadevan, Taylor Hanna, and Jonathan Moyer, the collaboration began in late 2023, alongside a 2024 contribution to UNICEF’s Global Prospects for Children report. Although the AfCFTA has been established, it has not yet been fully implemented across all African Union member states, so its full potential remains unrealized. Building on Pardee’s previous work on AfCFTA and intended to model the effects of a complete implementation of AfCFTA, the recent report uniquely leverages IFs’ bilateral trade model, covering all 55 African Union members, to capture both tariff and non‑tariff barriers, such as bureaucratic delays, which the model shows can suppress trade as strongly as tariffs themselves.  

The report finds that fully implementing the AfCFTA could boost intra-African trade by 97 percent and increase foreign direct investment (FDI) inflows by 20 percent by 2063, compared to the Current Path scenario. Moreover, the AfCFTA for Africa’s Young Population scenario is projected to generate far greater improvements in GDP growth and poverty reduction across Africa’s regions than the AfCFTA-only scenario.  

 Credit: Pardee Institute via UNICEF Innocenti  

However, it is the third scenario that can significantly amplify the benefits. Under the AfCFTA for Africa’s Young Population scenario, reinvesting cumulative AfCFTA revenue of around US$4 trillion, with US$2.4 trillion allocated to education, US$1.8 trillion to welfare transfers, and US$90 billion to R&D, yields multi-fold benefits by 2063. Africa’s GDP could rise to US$29 trillion (nearly US$3.5 trillion more than the no-AfCFTA scenario), 32.5 million people could be lifted out of extreme poverty, child stunting could fall by 3.4 million cases, malnutrition in children by 900,000, and female upper‑secondary graduation could increase by 72 million, narrowing longstanding gender gaps. 

By quantifying how trade gains can be ring‑fenced for child‑centered investments, the Pardee Institute provides governments and partners with key strategic policy actions. It recommends encouraging youth participation in AfCFTA implementation, creating transparent monitoring systems, reinvesting in human capital, establishing systems of accountability, and promoting public-private collaboration.  

The broader goal is to shift the narrative from merely economic integration to social transformation, with a particular emphasis on advancing the well-being of children and young people. Stakeholders can use Pardee’s insights in this report to design capacity‑building initiatives that foster digital, green, and STEM skills among the youth, consistent with emerging business models in the region. Aligned with the African Union’s Agenda 2063 and positioning the AfCFTA as a strategic development tool rather than merely a market‑access agreement, the findings underscore that investing in human capital today is essential to forge a healthier, better‑educated, and more prosperous Africa by 2063.