African Continental Free Trade Agreement Research Articles

The Transformative Trajectory for Nigeria in the Aftermath of Joining the African Continental Free Trade Agreement.

The African Continental Free Trade Agreement (AfCFTA) is a significant initiative aimed at promoting economic integration among 54 African nations. This article examines the historical context, challenges, and achievements of the AfCFTA, including tariff reductions, trade in goods and services, intellectual property rights, and free movement of persons. It also highlights the challenges faced by African economies, such as low industrialization and limited access to finance. The article proposes strategic solutions, such as infrastructure development and regulatory harmonization, to address these issues. The AfCFTA has created the world's largest free trade area, promoted trade in services, and attracted foreign investment. The article highlights its resilience during the COVID-19 pandemic and acknowledges its transformative potential in shaping Africa's economic future. Future prospects include scope expansion, regional integration, digitalization, and sustainable growth. Keywords: Global trade, AfCFTA, Regional Trade, Trade block

Positioning Nigeria as a First World Economy in the Era of Signing the African Continental Free Trade Area (AFCFTA)

The challenging circumstances of Nigerian businesses within the African continental free trade agreement has not really placed Nigerian economy at the desired global height as expected. The challenges in line with the ex post facto result of our study showed that, Nigerian was prepared to be launched at the global business circle but are still confronted with specific issues due to lack of proper African continental integration. Our report also showed that, Nigerian capital and financial markets are robust to leverage AfCFTA to boost trade and commerce, attract FDI, utilized our abundance natural and human resources and increase exports. It was however, recommended that: A special purpose vehicle should be created to monitor the progress of the AfCFTA strategies in each of the Member countries. Also, Nigerian government should work harmoniously with stakeholders to ensure trade liberalization especially export sector and start up so as to boost local production; trade Concessions should be given to infant industries, and laws should be made to protect SMEs from foreign and giant competitions; ease of doing business policies should be improved to attract foreign direct investment, FPI and capital inflows. Keywords: Globalization, AfCFTA, International trade, Trade balance, Classical & Neoclassical trade theories.

Conditions for Success in the implementation of the African Continental Free Trade Agreement: Reference Report

Conditions for Success in the implementation of the African Continental Free Trade Agreement: Reference Report

African Continental Free Trade Agreement and Nigeria’s Developmental Aspirations: Exploring the Promise and Perils

African Continental Free Trade Agreement and Nigeria’s Developmental Aspirations: Exploring the Promise and Perils

African Continental Free Trade Agreement and Nigeria’s Developmental Aspirations: Exploring the Promise and Perils

African Continental Free Trade Agreement and Nigeria’s Developmental Aspirations: Exploring the Promise and Perils

Is Trade Liberalization the Oil for Poverty Reduction in Nigeria? Evidence from African Continental Free Trade Agreement (AfCFTA)

Is Trade Liberalization the Oil for Poverty Reduction in Nigeria? Evidence from African Continental Free Trade Agreement (AfCFTA)

African Continental Free Trade Agreement's Conditional Most Favoured Nation: A Necessary Compromise?

AbstractThe inception of the African Continental Free Trade Agreement (AfCFTA) constitutes a major advancement in Africa's economic integration process. Diverging from what appears to be the norm in contemporary trade treaties, the agreement adopts a conditional Most Favoured Nation (MFN) clause hinged on the principle of reciprocity. Without the promise to reciprocate preferential treatment, the beneficiary state does not assume the right to demand MFN treatment. In broader discussions, this feature has been criticized for possessing the tendency to restrict trade. However, examining it in the context of Africa's trade paradigm, this paper argues that the non-automaticity of the AfCFTA's MFN clause is a cardinal feature safeguarding its existence.

GDP Growth and Welfare Effects of the African Continental Free Trade Agreement for Ghana

GDP Growth and Welfare Effects of the African Continental Free Trade Agreement for Ghana

Rethinking African Regionalism: Assessing How Regimes Use the African Union

Abstract: This paper critically analyzes the African Union's (AU) efforts toward continental integration, highlighting the gap between its rhetoric and the actions of member states' political leaders. The paper suggests that the AU's focus on individual state sovereignty, rather than continental unity, is partly due to its self-serving role for the political elite, serving as a vessel for regime-boosting and sovereignty-enhancing purposes. The paper acknowledges some of the successes of the AU in reducing armed conflicts and military coups through its Peace and Security Council, Panels of Conflicts Resolution, and the African Standby Force for peace missions. It also recognizes the potential benefits of the African Continental Free Trade Agreement (AfCFTA), which aims to lower or eliminate cross-border tariffs on most goods, promote investment, and pave the way for a continent-wide customs union. However, the paper argues that "performative" Pan-Africanism efforts demonstrate the persistent gap between the AU's rhetoric and actions. Therefore, a close examination of the AU reveals how reigning regimes use regionalism as "opportunity structures" in political crises. The paper suggests that the AU's focus on individual state sovereignty reinforces traditional notions of sovereignty and hinders the process of continental integration. The paper contributes to the scholarship of regionalism by examining the less prominent roles of integration in Africa. It also highlights how supranational entities can be adaptive and mutative for their specific locales. Finally, the paper calls for critically examining the AU's role and potential for promoting genuine continental unity.

What determines Tanzania's trade? A gravity approach

Based on the gravity model, this study examines the determinants of trade flows between Tanzania and its trading partners and attempts to predict the country's trade potential. Using a panel dataset of Tanzania's trade flows of 100 countries from 2000 to 2016, this study finds that the results are consistent with the predictions of the gravity model, with positive and negative coefficients for gross domestic product and distance, respectively. The predicted trade potential reveals that neighboring countries and some middle and superpowers have significant trade potential. Considering the important contribution of trade to economic growth and notwithstanding Tanzania's active membership in regional economic communities, such as the East African Cooperation, Southern African Development Cooperation, and the anticipated engagement in the African Continental Free Trade Agreement, this study provides policy recommendations to reduce trade barriers and diversify production to promote intra-African trade and enhance trade with the rest of the world.

Exploring the potential environmental impact of the recently established African continental free trade agreement on ECOWAS members' nations

AbstractThis research aims to comprehensively analyze the potential environmental impact of the African Continental Free Trade Agreement (AfCFTA) in Economic Community of West African States (ECOWAS) countries. To achieve this, a two‐model approach is employed, consisting of a fixed and random effects model covering the period of 1990 to 2021 and a difference‐in‐differences (DID) model focusing on the period of 2014 to 2021. The fixed and random effects model provides insights into long‐term trends and country‐specific effects, while the DID model assesses short‐term changes and estimates causal relationship effects of the AfCFTA by comparing changes in environmental indicators before and after the AfCFTA establishment. Our conclusion is based on the random effect, which was determined to be more appropriate following the Hausman diagnostic test and the DID results. The random effect model results show that GDP increases environmental degradation, whereas GDP squared improves environmental quality. Trade openness and energy consumption improve the region's environmental quality, while foreign direct investment inflows damage the environment. The DID results indicate that the treatment variable (establishment of AfCFTA) has the potential of worsening the environment while the control variable (ECOWAS member) has the potential of improving environmental quality. The interaction variable (treatment × control) enhances environmental quality. The study suggests that the trade agreement has the potential to contribute to sustainable development and environmental protection. Policymakers should seize this opportunity by implementing environmental safeguards, promoting sustainable trade practices, fostering regional collaboration, and ensuring effective monitoring and evaluation mechanisms.

African Continental Free Trade Agreement and Domestic Economy’s Competitiveness: How Competitive is the Nigerian Economy?

African Continental Free Trade Agreement and Domestic Economy’s Competitiveness: How Competitive is the Nigerian Economy?

Unleashing the development potential of Africa’s women through African Continental Free Trade Agreement (AfCFTA)

ABSTRACT This paper aims to analyse the African Continental Free Trade Agreement (AfCFTA) and its potential to unleash the development of women in Africa. The envisaged benefits of the AfCFTA include increased trade diversification, regional integration, enhanced human security, increased foreign direct investment and technological advancement. Despite optimism about the prospects of the agreement as a local innovation spearheaded by the African Union, pessimists raise questions about the extent of stakeholder engagement. The agreement must be gender-responsive to enhance outcomes for women cross-border traders. The paper concludes that the lack of gender sensitivity confirms the need to address the specific needs of African women, especially those involved in informal cross-border trade. Hence, for AfCFTA, the policy focus should be on ensuring the formalisation of women who participate in informal trade, thus helping increase access to markets, information and growth opportunities.

The effect of trade liberalization on SMEs performance in Nigeria

Small and medium enterprises (SMEs) are vital for achieving sustainable development. However, it remains unclear whether engagement in international trade-oriented policies improves SMEs operations, particularly in Africa, where concluded arrangements are made to partake in the African Continental Free Trade Agreement (AfCFTA). This study examined the role of trade liberalization on SMEs performance in Nigeria using the Central Bank of Nigeria’s statistical bulletin and the World Development Indicators from 1981 to 2019. The ARDL model showed that a 1% rise in trade openness improves SMEs performance by approximately 2% but only in the short run. For the control variables, a 1% increase in labor force participation reduced SMEs performance by about 6% in the short run and increased it by approximately 9% in the long run. The results also showed that a 1% rise in gross fixed capital formation in the short run reduced SMEs performance by approximately 5%. The results showed an inconclusive short-run effect of the exchange rate and taxes on SMEs performance. With a 1% increase in the exchange rate, SMEs performance improved by approximately 0.04% in the long run. Similarly, a 1% increase in taxes improves SMEs performance by approximately 2.90% in the long run. Findings suggest a positive effect of trade liberalization on SMEs performance and support the operation of AfCFTA in achieving sustainable development. Policy efforts should focus on productive investment strategies and using locally sourced inputs to raise the competitiveness of SMEs.

SACU and Trade Facilitation: A Post-Covid Pandemic Legal Analysis for Improved Efficiency

The Southern African Customs Union (SACU) prioritizes trade facilitation as one of its primary objectives in its founding Agreement (Article 2 (a)), implementing programmes to increase trade through expedited movement, and release and clearance of goods in the region. The oldest Customs Union in the world anticipated increased trade-flows following the entry into force and implementation of the progressive World Trade Organization’s Trade Facilitation Agreement (WTO TFA), and operation of the African Continental Free Trade Agreement (AfCFTA). Its aspirations, however, were dampened by the Covid-19 pandemic, which presented supply side challenges and slowed customs processes. Members introduced critical legislative measures to reduce or stop the spread of coronavirus disease (COVID-19) and initiate needed trade-facilitations interventions at a national and regional level. SACU also played a role in this regard, albeit a minimal one, through Council decisions. This raises the question of the SACU’s effectiveness, or ineffectiveness, its relevance in its functions, institutional structural readiness to address pandemics and regional emergencies, and future role it will play in this regard. This article examines trade-facilitation related responses from the institution following the outbreak of the pandemic, and adequacies/inadequacies of the said measures. The article, lastly, proposes trade-facilitation related approaches the SACU could adopt to improve efficiency for future pandemics and other global emergencies. SACU, Trade-Facilitation, Customs, Covid-19, Southern-Africa, Africa, AfCFTA, WTO, WCO, Tariff

SADC'S transport infrastructure: enhancing the AFCFTA’s prospects through regional economic integration

There is considerable significance, associated with the fact that the African Continental Free Trade Agreement (AfCFTA) has the potential to lift 68 million people out of moderate poverty. If fully implemented, the AfCFTA is estimated to increase regional income by 7 % by 2035. Operationalizing and implementing the African Continental Free Trade Area strategy, including regulating the regional economies' transport infrastructure, requires a great deal of work. It is the purpose of this article to examine how Regional Economic Communities (RECs), such as the Southern African Development Community (SADC), can contribute to the AfCFTA.
 In comparison with other regional blocs, intra-SADC trade represents only 10 to 14 percent of member countries' total trade [1, 2]. Despite Southern African trade routes and infrastructure being among the best. In terms of infrastructure coverage, Southern African countries still lag behind the rest of the world, whether it's road and telecommunications technology (ICT), population density, or power generation. Whether at the national or regional level, these types of infrastructure weaknesses reinforce the infrastructure deficit and exacerbate unemployment, inequality and poverty in the region.
 For the purposes of this article, a qualitative approach is being used to examine primary and secondary literature, including statistics, reports, and journal articles. According to the results of the study, the REC's infrastructure strategy will positively affect trade and, in turn, boost AfCFTA by improving trade among member states. To spawn structural transformation and create transnational growth corridors capable of driving economic growth and technological advancement, new transformative strategies are required.

Analysis of the Potential Impact of the African Continental Free Trade Agreement (AfCFTA) on the Nigeria Economy.

This paper assesses the potential impact of the Africa Continental Free Trade Agreement (AfCFTA) on the Nigeria economy. Autoregressive Distributed Lag (ARDL) Model were employed on quarterly data variables, including export and import trade for the period, March 2010 – June 2020. The result validates the trade-led growth hypothesis in the case of AfCFTA and Nigeria economic growth. Showing export trade as positively related with gross domestic product in the long run, agreeing with economic theory, that export impact positively on gross domestic product. Import indicates negative effect on gross domestic product in the long run. The error correction term (ECT) coefficient indicates that at 29.14% the disequilibrium due to the shock in the previous quarters is adjusted back to the long run equilibrium in the current quarter. The study suggests that for Nigeria to truly benefit from the AfCFTA, an outward-oriented strategy should be adopted, through trade composition by switching from exports of raw materials and semi-manufactured goods to high valued-added goods. Also, the government should scale up issues of productivity in the real sector of the economy and shift from being a net importer to a net exporter of non-oil products. Our results contradict earlier observers of Nigeria, who have argued that the implementation of the AfCFTA could reduce the tariff, revenue accruals, frustrate industrialization, and promote the dumping of products on the Nigerian economy.

Potential Effects of the African Continental Free Trade Agreement on the Namibian Labour System

Potential Effects of the African Continental Free Trade Agreement on the Namibian Labour System

Nigeria’s Foreign Policy, Regional Obligations and Constant Order Closures

Colonialism destroyed Africa’s long-standing intra-African trade. Hence, at independence there was a move for regional integration to diversify Africa’s economy. Nigeria had been at the driving seat of Africa’s regional integration. In West Africa, Nigeria pioneered the formation of the Economic Community of West African States (ECOWAS) in 1975. Though Africa has 21.2% of the global landmass and 13.7% of world population, its share of global economic activities is a meagre 2.6%. Its intratrade is 12%, paralleled to an average of 53.5% in other regions of the world. However, Nigeria over time has engaged in anti-trade policies like border closure, the latest being on 20 August 2019, three months after signing the African Continental Free Trade Agreement (AfCFTA). This has caused ripples within Nigeria, West Africa and Africa at large. This study interrogates Nigeria’s constant border closures, with questions on whether it is in Nigeria’s national interest and if its objective were achieved? The study uses the Regional Leader Role framework of analysis, a sub-set of National Role theory (NRC). The study is a qualitative and non-experimental study and is based on the single case ex-post-facto (after-the-fact) design. Documentary method of data collection is used. The study concludes that Nigeria with over 1,499 illegal land routes into the country, cannot even ‘close’ its border, hence border closure is a lose-lose policy for Nigeria and recommends collaborative actions with her neighbours, the strengthening of border and ports infrastructures as the way forward.

COVID-19, Trade Disruptions, and Gender: A Survey of the Potential Interactions and Consequences for Economic Development in Sub-Saharan Africa

ABSTRACT The COVID-19 pandemic is expected to significantly reduce trade flows due to global trade restrictions and economic lockdowns. The impact of a trade disruption is, however, not gender neutral. In developing countries, women form the majority of low-skilled and labor-intensive jobs in the export sector that are most affected by the pandemic. This article is based on a literature review that explores research on the gendered implications of trade on economic development. It also discusses the effects of previous epidemics on health and human capital in Africa. It outlines the various channels through which a pandemic-induced trade shock could have and has had ripple effects on African women. It provides some early evidence on the gendered impact of the current pandemic. Analysis of the literature reviewed highlights the importance of collecting and using gender-disaggregated trade data to devise socioeconomic and export trade policies in the short-term and long-term to protect vulnerable populations including women. The article concludes that the pandemic can be used as an opportunity for sub-Saharan Africa countries to build back better after COVID-19 by strengthening intraregional trade through the African Continental Free Trade Agreement (AfCFTA), investing in removal of gender-specific barriers facing female traders and entrepreneurs, and promoting gender mainstreaming in trade to drive sustainable development and sow the seeds of future resilience.