Harnessing AfCFTA and Foreign Direct Investments for Economic Transformation in C-4 Countries: A Multiregional CGE Model Analysis

The African Continental Free Trade Area (AfCFTA), one of the most ambitious projects of the African Union's Agenda 2063, offers promising prospects for economic integration, growth, and improved welfare in Africa. This article provides an ex-ante evaluation of the economic effects of AfCFTA implementation within the C-4 group of countries - Benin, Burkina Faso, Mali, and Chad - the continent's leading cotton producers. Using a recursive dynamic computable general equilibrium (CGE) model, the results suggest that the AfCFTA would yield positive economic spillovers across most sectors in these countries, particularly in livestock and meat, cereals and other crops, textile and clothing, and light manufacturing. These effects are further amplified when accompanied by trade facilitation agreements. Moreover, an increase in foreign direct investment (FDI) in the textile sector, driven by the AfCFTA, would stimulate not only this strategic sector but also related branches of the economy, thereby supporting macroeconomic dynamics. The article highlights the necessity of aligning AfCFTA implementation with active policies for trade facilitation and FDI promotion in high-potential sectors. Such a strategy would maximize the economic benefits of the agreement while consolidating the C-4's position in cotton and textile value chains, fostering inclusive economic development. This strategy, in turn, require robust political and economic governance frameworks.