African Continental Free Trade Area Research Articles

African Continental Free Trade Area Agreement – Does the Facts Support the Benefits for Nigeria?

Hesitantly, but finally, Nigeria joined the African Continental Free Trade Area (AfCFTA) with the Nigerian President, Mohammadu Buhari, signing the protocol at the African Union Summit in Niamey on July 7, 2019 based on perceived benefits. This study interrogated the purported benefits for Nigeria using standard trade costs between Nigeria and peer countries in Africa. Using a content analytical framework on a dataset by World Development Indicators and World Integrated Trade Solutions, the study found that average tariff rate in Nigeria is very high when compared to that of her major trading rivals in Africa like Ghana, Egypt and South Africa. Furthermore, the study found Nigeria in a comparative disadvantaged position on the ease of doing business in the same setting. Also, Nigeria’s major export commodity is crude oil and lubricants which has little or no market in the continent. Besides, trade-related infrastructure, especially roads and maritime corridors, in Nigeria is poor even by African standards. With these structural problems, ipso facto, Nigeria may not benefit maximally and comparatively in the enlarged continental market envisioned by the AfCFTA agreement. The study therefore, recommended that Nigerian government should continue to maintain the present cautious approach and refrain from making further commitments on the AfCFTA deal. In the meantime, the country should embark on massive infrastructural and trade-related development, improve the ease of doing business and diversify the economy in order to be in vintage position to exploit the potential opportunities offered by the AfCFTA in the medium-to-long term horizon.

Assessing the Potential Impact of the African Continental Free Trade Area on Least Developed Countries: A Case Study of Malawi

The agreement establishing the African Continental Free Trade Area (AfCFTA) has been touted as an important pillar and driver for economic growth, industrialisation and sustainable development in Africa. Among its expected key benefits is the promise to increase the level of intra-African trade by eliminating import duties and other tariffs among member countries, in addition to general trade expansion. However, unlocking the AfCFTA’s full potential will largely depend on how the continent is able to restructure its exports, which are poorly diversified and remain highly dependent on primary commodities. Moreover, intra-African trade remains dominated by a few big regional players. To this end, there have been growing fears that the AfCFTA’s anticipated gains, and associated losses, are likely to accrue unevenly. Countries with large productive capacities in manufacturing or stronger supply capacities in non-manufactured products may reap more rewards than weaker landlocked and smaller economies, particularly the least developed countries (LDCs). These concerns have led to a number of countries, including Malawi, pushing for special and differential treatment in the implementation of the AfCFTA’s provisions on the elimination of import duties and other tariffs. Many LDCs, including Malawi, rely heavily on international trade taxes as a source of government revenue. There is a legitimate concern that such economies are likely to be left grappling with the negative effects of tariff cuts in the form of substantial fiscal revenue loss. This article explores the potential impact of the AfCFTA on LDCs, with a focus on Malawi. It reviews Malawi’s intra-African trade position in terms of its export potential and examines the likely impact that the AfCFTA agreement would have on the country’s fiscal revenues.

The African Continental Free Trade Area: Toward a New Legal Model for Trade and Development

International trade law is at a turning point, and the rules as we know them are being broken, rewritten, and reshaped at all levels. At the same time that institutions like the World Trade Organization (WTO) face significant change and a global pandemic challenges the rules of the market, Africa’s new mega-regional trade agreement, the African Continental Free Trade Area (AfCFTA), is emerging as a promising framework for redesigning international economic law. As this Article will argue, the AfCFTA presents a new normative approach to trade and development that is positioned to rewrite the rules in a more inclusive and equitable way and, over time, possibly affect global trade well beyond the African continent. Historically, trade and development have been linked through the framework of Special and Differential Treatment (S&D), which has been a central feature of the WTO and is increasingly shaping regional trade agreements (RTAs) as well. Although the connection between trade and development is more important than ever before, traditional S&D is not positioned to deliver on broader priorities of social and economic development in the current international climate. Fortunately, as this Article will argue, Africa’s approach under the new AfCFTA sets the stage for a needed refresh of S&D. While the AfCFTA incorporates traditional aspects of S&D, it also includes elements of a forward-looking, rules-based approach to further economic and social development, advancing the Sustainable Development Goals (SDGs). This new dimension of S&D holds great potential for promoting integration through trade, representing the needs of a diverse group of countries in the rulemaking process, and reshaping international economic law more broadly to generate positive development outcomes. This Article begins with an assessment of the AfCFTA as an alternative model for trade and development law, evaluating the agreement in the historical and evolving context of S&D and examining its role in shaping a new normative approach to S&D. The AfCFTA, we argue, represents a shift from using S&D as a largely defensive trade approach to one that positions S&D as an affirmative tool for achieving sustainable development through the design and implementation of the rules of trade themselves, while still maintaining flexibility for countries that need it. This new approach may finally replace the old trade paradigm of the ”haves and have nots” with a system in which trade rules can be designed to benefit all. Although the AfCFTA is still at an early stage and will have to overcome formidable challenges, this Article provides an initial assessment of the AfCFTA’s proactive new model in the context of the substantive areas of law identified as next-stage (Phase II) negotiating priorities: intellectual property rights (IPR), investment, and competition law. The Article’s comparative assessment draws upon the laws of African nations, African and international RTAs, and other proposals for international legal reform. Finally, the Article looks to the future, positing that the AfCFTA could be the best legal instrument available to break the stalemate in international rulemaking, design new trade law approaches to pressing issues like global health and food security, and close the loop between trade rules and development goals, including the seventeen SDGs. As the AfCFTA is rolled out and implemented, it could have a profound impact on trade and development law, reshaping the rules for Africa and perhaps the world as well.

Africa: COVID 19 and the Future of Economic Integration

As part of the Global agenda 2030 for sustainable development and agenda 2063 as Africa aspires to fulfill a major development objective, the current breed of African leaders after (re)democratization in the 1990s, have shown greater commitment to adopting and implementing decisions for regional/economic integration as a common strategy for the development of the continent. Thus, in 2018, 44 countries signed the African Continental Free Trade Area (AFCFTA) in Kigali.Nevertheless, the novel COVID19, since it revealed its ugly head has had disruptive impacts on world economy. Sub Saharan Africa also suffers from these global economic effects and thus, amidst COVID19, the region will see economic growth reverse and plunge to between -2.1% to as low as -5.1%.The economic shrinkage will cost Sub-Saharan Africa between $37 billion to $79 billion in lost output in 2020 due to a sharp decline in output growth. Therefore, can African countries achieve this development path of integrating their economies amidst the COVID19? What remain the prospects for Africa’s current commitment towards economic integration? Within this paper, I argue that, although and somewhat the future prospects for Africa’s economic integration remain uncertain and blur due to the destabilizing effects of the COVID19 on individual African economies; Yet, the sense of urgency of the current global crisis would translate into adding impetus to accelerate growth: first, an opportunity to re-think macro-economic policies; second, the COVID19 has further revealed the vulnerability of African economies and thus, will provide a strong signal to African leaders and significantly adding an incentive to initiating full and concrete measures to ensure economic integration.

Dispute Settlement Mechanisms in African Regional Economic Communities: Lessons and New Developments

Abstract African regional trade agreements often provide for dispute settlement mechanisms and procedures that should be followed. They also establish judicial bodies or tribunals for the respective African Regional Economic Communities. Despite the existence of judicial bodies, African governments do not usually litigate against each other on trade-related disputes. However, the few cases adjudicated by the regional judicial bodies are insightful of how contemporary trade disputes shape the development of community law. With reference to case law, this article presents lessons from regional judicial bodies. Notwithstanding the lessons learnt, there are challenges too. In response to the challenges, new developments on the continent, adopted through the African Continental Free Trade Area signal a move towards respecting rules-based trade through ensuring legal predictability and certainty for trade dispute settlement. Thus, this article will also provide a detailed analysis of the dispute settlement mechanism under the African Continental Free Trade Area, a system akin to World Trade Organisation.

The African Continental Free Trade Area

Political momentum towards Africa-wide free trade has been intensifying. In March 2018, over 40 countries signed the African Continental Free Trade Area (AfCFTA) agreement. Once fully implemented, the AfCFTA is expected to cover all 55 African countries, with a combined GDP of about US$2.2 trillion. This SDN takes stock of recent trade developments in Sub-Saharan Africa and assesses the potential benefits and costs of the AfCFTA, as well as challenges to its successful implementation. In addition to increased trade flows both in existing and new products, the AfCFTA has the potential to generate substantial economic benefits for African countries. These benefits include higher income arising from increased efficiency and productivity from improved resource allocation, higher cross-border investment flows, and technology transfers. Besides lowering import tariffs, to ensure these benefits, African countries will need reduce other trade barriers by making more efficient their customs procedures, reducing their wide infrastructure gaps, and improving their business climates. At the same time, policy measures should be taken to mitigate the differential impact of trade liberalization on certain groups as resources are reallocated in the economy and activities migrate to locations with comparatively lower costs.

Rules of Origin. Notes on Challenges for the African Continental Free Trade Area (AfCFTA)

The African Continental Free Area Agreement aims to create a tariff-free continent and the worlds’ largest free trade area (FTA). This contribution notes some issues and challenges to be considered in the design and further development of the AfCFTA Agreement and the impact thereof on the eventual specificRules of Origin to be adopted as part of the ongoing negotiation process. AfCFTA, ECOWAS, EAC, SACU, CEMAC, non-traditional MFN principle, Regional Economic Centres (RECs)

Corporate Social Responsibility and Economic Globalization: Mainstreaming Sustainable Development Goals into the AfCFTA Discourse

There is a widely held belief that a borderless global economy brings numerous advantages including economic growth, development and welfare maximization. Globalization equally drives (and is driven by the activities of) large corporations involved in cross border operations. While corporate social responsibility (CSR) is a tool with which integrated developed economies ensure corporate behaviours remain within public interest confines, the regional integration agenda in Africa appears focused on liberalization of trade and investment at all costs. This article examines CSR in regional integration discourse, especially within the European Union, extracting important lessons for the African Continental Free Trade Area (AfCFTA). It unifies the ultimate agenda of both CSR and African regionalism in achieving sustainable development. Advising against misconstruing CSR as an unnecessary trade barrier, the article demonstrates why and how CSR values can be mainstreamed into AfCFTA discourse towards ensuring inclusive growth in Africa and improving the global competitiveness of domestic businesses. AfCFTA, Africa, CSR, Corporate Responsibility, Regional Integration, Sustainable Development Goals, Trade Liberalization.

Launch of the African Continental Free Trade Area (Afcfta) within Agenda 2063: An Assessment of the ‘Actorness’ of the African Union (AU) in International Relations (IR)

This paper seeks to examine the dynamics of decision making and African Union’s (AU’s) capacity to attain the achievement of regional integration through the continental Free Trade Area (CFTA) using Agenda 2063 as the basis. The paper is attempting a new way at capturing the AU’s internal and external behavior – one that takes into account, not only the AU’s own characteristics – but the kinds of political, economic and social transactions it undertakes, and the feedback processes engendered. The AU’s Agenda 2063 is both an economic and social model that supports market capitalism and one that incorporates Pan-Africanism as a guiding set of values, and how this ideology defines and reinforces regional integration. Studies have long accepted the extent to which, an entity like the European Union (EU) is capable of becoming a coherent actor in the global governance complex; which indeed raises important questions about what constitutes ‘actorness’ in contemporary international relations. Can regional entities such the African Union (AU) emerge as significant actors in global politics? And if so, how can we conceptualize such actorness? While there is a rich literature on the EU as an international actor, comparatively little work has been devoted to outline and to define the AU’s actorness. This paper aims to close that gap and to contribute to the discussions pertaining to the assessment of actorness and by extension, the case of the AU within the context of Agenda 2063 and the recent launch of the African Continental Free Trade Area (AfCFTA) in international relations (IR).

Trade in Services in the African Continental Free Trade Area: Prospects, Challenges and WTO Compatibility

ABSTRACT This article engages with the recently adopted agreement for the African Continental Free Trade Area (AfCFTA) in the area of services. While services trade had heretofore stood at the queue of African trade pacts, the AfCFTA breaks new grounds by negotiating goods and services concurrently, signalling a paradigm shift and a commitment to a deeper integration of the continent. Upon Members’ implementation of the Protocol on Trade in Services, whose aim is to establish a single market in services, the region will be the largest economic integration agreement ever concluded since the birth of the World Trade Organization (WTO). This paper sets out to analyse the provisions of the Protocol and how they contribute to achieving the objective of attaining a single market where services (alongside goods, people and capital) move unrestricted.

Africa’s Free Trade Area: An Assessment of the Readiness of Regional Economic Communities in Continental Integration

The recently launched (July 2019) African Continental Free Trade Area (AfCFTA), whose setup begun in 2015, is widely seen as the crucial driver for economic growth, industrialization and sustainable development in Africa. The concluded agreement establishing the AfCFTA provides rules that will govern the movement of merchandise and services across the continent. It sets up the institutional framework that will guide and regulate the CFTA implementation processes. There is a recognition that the current path of economic regionalism in Africa is encouraging but has serious fractures on the continent and the global trading system. In the attempt to achieve an overarching continental strategy for continuous development, there are vestiges of regional economic integration schemes, in the areas of multiple economic alliances, overlapping schemes, the non-implementation of protocols and many other fractures. In an attempt to alleviate these vestiges, the latest wave of continental innovation – AfCFTA – raises a long-standing conundrum for continental order: when are regional organizations useful, and even essential complements to the ends of continental governance for benefit, and when do they threaten or undermine the achievement of these goals? This paper’s contention is that regionalism within Africa is anchored on many theories of integration, among them are functionalism, neo-functionalism, and intergovernmentalism, and based on the European integration experience. But drawing lessons from the enormous, political and economic as well as, security challenges confronting the African Union (AU) and the Economic Commission for Africa (ECA), how viable and ready can the RECs be used as ‘vehicles’ in support of the achievement of continental integration in Africa, when they are so ‘gullible’ themselves?

Will the Afcfta Accelerate Inter-African Economic Integration?

As a result of efforts toward a single market, African countries are moving forward on the African Continental Free Trade Area (AfCFTA) and preparing to become an integrated market from 2021. According to the World Bank (2020), the economic impact of the AfCFTA is prospected to reach nearly US$450 billion by 2035, which is a promising future for the 54 member countries. While the African Union targets 2035 to complete the AfCFTA, there are still several issues remaining for African countries to implement this trade agreement consistently. This opinion summarizes the potential problem of implementing the AfCFTA. First, even if regional economic groups such as ECOWAS, EAS, and SADC embrace intra-regional trade, the actual trade volume within the region is not that high as we may expect. It turns out that African countries could consider the value chain of raw materials to produce value-added goods for increasing RVC, which takes time. Second, the AfCFTA does not guarantee unconditional free trade between countries when the countries’ priority on protecting producers and trade liberalization conflict with each other. Third, sanitary and phytosanitary measures may push the barrier up of market access for small-scale producers, especially those who sell agricultural products. Lastly, transportation infrastructure in the African continent may be improved to connect country to country. Even if there are still challenges to achieve an economically integrated continent, the AfCFTA may certainly increase intra-continent export volume and contribute to income growth, poverty eradication, and development. It is time to carefully review the potential problems and conflicts for the brighter future of the AfCFTA.

The Cooperation on Competition Policy under the African Continental Free Trade Area

The dream of establishing an African common market that would lead to an African Economic Community begun in the 1980s, when the Lagos Plan of Action for the Economic Development of Africa was adopted. The establishment of the African Continental Free Trade Area (AfCFTA) which came into force on 30th May 2019 provides the most recent, and perhaps the most critical milestone in the integration process because it provides a foundation upon which an African Customs Union can materialize. It is recognized that for the AfCFTA to meet its general objectives under Article 3 of the AfCFTA Framework Agreement; States Parties need to cooperate on competition policy which is part of the second phase of the negotiations that will culminate into a Protocol on Competition Policy. At the time of writing this paper, the negotiations on the cooperation on competition policy are on the horizon. As such, this paper seeks to inform the design and implementation of the proposed competition policy under the AfCFTA by espousing the benefits, potential and challenges of adopting a continental competition policy framework. More importantly, building upon the literature on competition policy under free trade areas (FTAs), this paper also seeks to answer a pertinent question on the mind of the majority of stakeholders which is: how should a competition policy under the AfCFTA be fashioned?

The African Continental Free Trade Area

AbstractMonopolies continue to dominate world trade by controlling global production and distribution chains. Neither free trade nor fair trade has transformed this system; the recent rise in nativism and pseudo‐protectionism has not, and cannot, address these problems either. The African Continental Free Trade Area (AfCFTA), the largest free trade area in the world, promises to be different. AfCFTA rejects classical, neoclassical, and Marxist theories of trade, appealing, instead, to non‐aligned pan‐Africanism. It advocates continental free trade as a way to overcome the lingering effects of slavery, colonialism, and neocolonialism. However, its exclusive focus on continental Africa, its disinterest in systemic redistribution, and encouragement of the private appropriation of socially created land rents prevents AfCFTA from achieving its goals. In fact, AfCFTA might actually foster inequality—progress alongside of poverty—and in so doing, undermine the very essence of this trade regime. What Henry George (1886) called “true free trade,” a theory based on making land common by socializing land rent, offers a more promising and powerful model through which to achieve the pan‐African agenda. Indeed, only true free trade can definitively decolonize global trade.

The African Continental Free Trade Area and the trade facilitation agreement: some regional macroeconomic impacts

This contribution analyses the potential impacts of the African Continental Free Trade Area (AfCFTA) and the positive role played by the Trade Facilitation Agreement (TFA) to augment its impact. We provide empirical evidence that expected trade flows and real GDP growth from the AfCFTA are relatively significant but are amplified by the TFA. In addition, the impacts on trade and economic growth are stronger when the TFA is extended to trade flows with non-African regions. More interestingly, all African regions experience an increase in exports of industrial and intermediate goods, which constitutes a catalyst for industrialisation and structural economic transformation.

A Step Closer: Economic Integration and the African Continental Free Trade Area

Post-colonial Africa views economic integration as an endogenous means for attaining self-reliant, sustainable development. Working under various regional and sub-regional economic institutions, states elaborated several norms in search of legitimacy in economic competence. However, several political and economic pathogens, including weak institutions, have blighted those efforts. This paper interrogates the African Continental Free Trade Area (AfCFTA or CFTA), which is the latest attempt to reboot the integration drive and achieve sustainable development. The CFTA seeks to create a geographic zone where goods and services will move freely among member states by removing trade distortions and boosting factor mobility, competition, and investment. After a rigorous analysis of the relevant normative instruments and examining the vertical and horizontal relationship between the CFTA and regional economic communities (RECs)/member states, the paper articulates some objective criteria for measuring the CFTA’s effectiveness. It concludes that, if faithfully implemented, the CFTA could maximize utility and increase welfare. For the analysis and conclusions, the paper deploys principles of public international law as well as economic theories, with a blend of political and moral philosophy.

Local industrial production in EAC & Uganda (reflecting on the AfCFTA and the emergence of COVID-19): legal framework

This paper analyses the state of local industrial production in Uganda and how the emergence of COVID-19 has impacted it. This analysis bears in mind the regional context of Uganda as Partner State of the East African Community and a member of the African Union. Both of these institutions have mechanisms that impact on trade and relatedly on local industrial production, most notably the newly established African Continental Free Trade Area (AfCFTA). Overall, the paper makes a case for furthering local industrial production drawing on the lessons from the economic and developmental impact that the pandemic has wrought on the country.

Facilitating Trade and Strengthening Market Access in the Southern African Customs Union: A Focus on South Africa’s Customs Reform

In the modern business environment, emphasis is placed on timely production, requiring timely delivery and fast and predictable release of goods at the borders. Experiencing delays in the supply chain of goods increases transaction costs, which can, in consequence, raise the price of export and import products. South Africa is a developing state that needs to be competitive on every front to secure economic growth considering the current push towards the African Continental Free Trade Area (AfCFTA). This article aims to tackle the issue of non-tariff barriers to trade, particularly restrictive customs and administrative procedures at border crossings in the Southern region, by exploring trade facilitation measures which can be crucial for integration and development. Trade facilitation regulates behind-the-border measures and encompasses reform of a country’s customs policies and infrastructure as customs operations can be characterised by a complex array of requirements for traders, including documentation requirements. This article accordingly examines how South Africa is evolving its customs environment to facilitate trade further and to enhance market access of goods into the country and the Southern region. South Africa has adopted a Custom Modernisation Programme (CMP) under the guidance of the South African Revenue Services (SARS). The adoption of this programme can potentially reduce the delays in trade transactions at border points.

African Continental Free Trade Area (AfCFTA): A Corner Stone for Pan-Africanism and Dispute Settlement Mechanisms

African Continental Free Trade Area (AfCFTA): A Corner Stone for Pan-Africanism and Dispute Settlement Mechanisms

Інтеграційні об’єднання Субсахарської Африки: історія становлення та перспективи розвитку

The article deals with the main integration associations of such a promising but controversial region, as Sub-Saharan Africa. The author emphasizes the continuity of regional integration associations’ formation that goes back to the colonial times, to the first half of the 20th century. Periodization of ongoing integration processes in Sub-Saharan Africa is proposed in the research. Key milestones for the further regional integration were: - 1963, the foundation of the Organisation of African Unity (OAU); and the beginning of Independence for many postcolonial countries of Sub-Saharan Africa; - 1980, the Lagos Plan of Action adoption that led to the establishment in future of the following integration associations for Sub-Saharan Africa: ECOWAS, Economic Community of West African States; COMESA, Common Market for Eastern and Southern Africa; ECCAS, Economic Community of Central African States; - 1991, the signing of the Abuja Treaty, which called for the African Economic Community creation as the new stage for economic cooperation and integration of the continent, including Sub-Saharan Africa; - 1999-2002, the Organisation of African Unity (OAU) transition into the African Union (AU), launching of new partnerships and integration associations for Sub-Saharan Africa, increased integration. At the beginning of the 21st century, there are serious economic and political factors for disintegration in the region. Nevertheless, the following integration associations, as stated in the article, proved to be effective: SADC, Southern African Development Community; EAC, East African Community; COMESA, Common Market for Eastern and Southern Africa. The author argues that the existence since 2015 the Tripartite Free Trade Area (TFTA) between EAC, COMESA and SADC marks a significant step forward for strengthening of integration associations for Sub-Saharan Africa, as well as for the achievement of African Union’s purpose to provide the African Continental Free Trade Area.