African Free Trade Research Articles

The Impact of Implementing The African Free Trade Agreement on Agricultural Foreign Trade between Egypt and The Most Important African Countries

The Impact of Implementing The African Free Trade Agreement on Agricultural Foreign Trade between Egypt and The Most Important African Countries

Intra‐African trade and corruption: Evidence from sub‐Saharan African countries

AbstractCross‐border trade is critical to livelihoods and food security in sub‐Saharan Africa (SSA), but bribery remains one of the main barriers to economic growth in the region. Does corruption affect intra‐African trade? We address this issue by considering the bilateral trade among 48 sub‐Saharan African countries from 2000 to 2018, which are subject to a high level of corruption. Using a gravity model, the results show that corruption has a positive impact on exports and a negative impact on imports of global, primary, and manufactured goods. However, the difference in the level of corruption between country pairs is negatively and significantly associated with intra‐African trade in manufactured goods. Therefore, to promote the corruption‐free environment needed to facilitate the African Free Trade Agreement, it is essential for policymakers in sub‐Saharan African countries to combat corruption to boost intra‐African trade.

Brief description of the African Free Trade Area in the integration process

Le père du panafricanisme (Kwameh Krumah) avait prédit que sans l’union de l’Afrique, aucun développement ne pourra être atteint. Dès l’accession des Etats africains à la souveraineté internationale, il s’est senti la nécessité de promouvoir la voie de l’intégration africaine.Diachroniquement, la Déclaration de Monrovia (1979), le Plan d’action de Lagos et l’Acte final de Lagos (1980), le Traité d’Abuja 51991), l’Union africaine et finalement la zone de libre-échange continentale africaine constituent des phases indéniables dans le processus d’intégration africaine.L’accord sur la zone de libre-échange continentale africaine constitue la première étape dans les phases du processus d’intégration telle que prévue dans le Traité d’Abuja instituant la Communautés Economique Africaine qui s’appuie sur huit (8) communautés économiques régionales (CER) reconnues par l’Union africaine à la suite de la décision relative au moratoire sur la reconnaissance des CER de l’Assembly/AU/Dec.112 (VII) lors de la première conférence des ministres africains de l’intégration tenue les 30 et 31 mars 2006 à Ouagadougou au Burkina Faso. C’est pourquoi, celles des communautés économiques régionales qui n’ont pas encore créé leurs propres zones de libre-échange doivent s’y conformer ? Il s’agit d’un processus d’intégration long certes, mais irréversible. Mots clés: Libre-échange ; intégration, commerce, marché, circulation.

A Continental Free Trade Area in the Absence of the Free Movement of People is Inconceivable

The African Free Trade Continental Agreement (AfCFTA) represents renewed efforts by the current cohort of African leaders to move the continent closer to its self-reliance ambitions, and it aims to build on the foundation laid by the founding fathers of the African Union aimed at achieving a better life for Africans through deeper regional economic integration. Central to achieving the Agreement’s objectives is the realisation of the free movement of persons, which is envisaged to be a vehicle for deeper regional integration. This article provides a brief conceptual analysis of the Free Movement of Persons concept, its benefits in driving regional integration, successes, and the potential challenges that may hinder the full realisation of the AfCFTA’s objectives as a mutually reinforcing agenda. In addition to contributing to existing literature, this article explores whether the Free Movement of Persons is indeed a sine qua non for the success of the AfCFTA. Drawing on lessons from the implementation of other regional trade integration projects, the European Union integration model, in this instance, the article recommends key interventions to bolster implementation efforts.

Leveraging the Potential of the African Continental Free Trade Area: Logistics Challenges and Development Paths for Future Value Chains in Africa

Background: With a rapidly growing young population, the African continent provides a high but barely exploited economic potential. Creating an African free trade zone is one of the African Union’s major initiatives to increase prosperity. Even though the AfCFTA has already come into force, its potential has not yet been fully exploited. This study investigates the logistics challenges associated with the AfCFTA and potential solutions and development paths for future value chains. Methods: The study builds upon a two-stage research process. First, applying the Nominal Group Technique with a group of 19 industry experts, current challenges and strategies to deal with them are conducted, and statements about potential development paths emerging from the AfCFTA are synthesized. Second, a questionnaire among additional industry experts is done to assess the results of the first stage. Results: The article sheds light on the barely untapped field of logistics challenges hindering the AfCFTA to leverage its potential. Strategy fields to address current challenges are explained, and the first indications of how the AfCFTA will shape supply chains in the mid-term are outlined. Conclusions: The article underlines the importance of logistics in the development of pan-African value chains and highlights potential development paths that may arise in the medium term. It also emphasizes the growing need for cooperation between politics, business, and research to overcome current logistics challenges and leverage the potential of the AfCFTA.

The Stakes and Challenges of Promoting the Algerian Exports under the African Continental Free Trade Zone

This study aims to determine and analyse the stakes and challenges facing the promotion of Algerian exports within the framework of the African Continental Free Trade Zone. In order to achieve that, this study uses the historical research method to trace the emergence and paths of the African Continental Free Trade Zone and Algeria's accession to it. It also uses the analytical research method to analyse the stakes and challenges facing the Algerian exports. The study concluded that the most important stakes and challenges are: the existence of economic blocs in Africa, which preceded the African Free Trade Area; the weakness of logistical capabilities and traderelated infrastructure in Algeria; the weakness and absence of trade-related infrastructure in other Africancountries; the subordination of many African economies to Western countries; the large number of disputes and political instability in the African countries; the weakness of competitiveness of Algerian products as a result of their dependence on imported inputs; in addition to many issues related to the African Free Trade Zone, which has not yet been completed

Harnessing African Free Trade Area and WTO for Clean Energy Transition

Abstract In 2018, the African Union adopted the Agreement on the African Continental Free Trade Area (AfCFTA) with the aim of creating a common market for goods and services that would serve over 1.3 billion people in Africa. This is a paradigm shift towards a deeper continental integration in Africa whereby AfCFTA would be one of the biggest multilateral trading areas in the world. Although AfCFTA pursues sustainable development goals that embed reducing carbon dioxide emissions in line with international legal instruments on sustainability which applies to Member States of the WTO too, the legal provisions of AfCFTA and WTO that link trade and CET appear rather weak. This article provides a comparative analysis of AfCFTA and WTO legal frameworks with a focus on relationships, challenges and opportunities that incentivise clean energy transition (CET) as part of their sustainability agenda. The article contributes to the discourse on the interplay between regional trade and global trade laws in relation to climate change and sustainable development. As no previous study has compared the legal dynamics of the WTO and AfCFTA in relation to CET, the article provides a novel contribution to the efforts of unlocking the development potential of AfCFTA while enhancing global and regional multilateral trading systems.

Settling Trade Related Labour Disputes: FTAs’ Pathways for Greater Social Justice in Globalization

Since the conclusion of North African Free Trade Agreement (NAFTA) in 1994, an increasing number of Foreign Trade Agreements (FTAs) have included labour provisions along with specific dispute settlement mechanisms for these provisions. This article analyses how labour provisions have been included in FTAs’ since the early 1990s and critically accesses their suitability and effectiveness in terms of domestic labour reform and trade-related labour dispute settlement. It concludes by evaluating the case for the inclusion of labour provisions in FTAs’ and argues in favour of tailor-made rules suited to the precise reality of countries’ labour markets and regulatory environment. FTAs, labour provisions, sustainable development, ILO, globalization, CPTPP, NAFTA, rule of law, European Union FTAs, dispute settlement

Determinants of trade flow of some selected non-traditional agricultural export commodities in Nigeria

This study analysed the determinants of trade flow of some selected non-traditional agricultural export commodities in Nigeria, for the period 2007 to 2017. The objective of the study was to analyse the factors that determine the export of these commodities. The study used trade data of thirty-six importing countries of these commodities around the world. The secondary data used was sourced from various institutions’ databases. A balanced panel data from 36 countries for the years 2007-2017 were used with one dependent variable and ten explanatory variables (a total of n=396, N=36, and T=11); all variables were expressed in natural logarithm. The gravity estimation model was used in data analysis. The Hausman test was used in model selection and the test rejected the null hypothesis (random effects were efficient). Therefore, the fixed effects model was used in the gravity model results’ interpretation. The gravity model results indicate that Nigeria’s export of non-traditional commodities (classified as HS12 in the United Nations International Trade Statistics) follows the basic gravity model apriori expectations, implying that bilateral trade flows will increase in proportion to the trading partner’s Gross Domestic Product (GDP) and decrease in proportion to the distance involved.The level of openness of Nigeria’s economy and that of the importing countries were major determinants of trade flow of Nigeria’s HS12 commodity exports. This variable carried the expected positive sign for both Nigeria and its trading Partners and was also statistically significant at the 5% level. However, the real exchange rate variable was not a major determinant of HS12 commodity trade. The distance variable was statistically significant indicating the need for regional trade expansion. The dummy variable of the trading partner being an African country was positive and a significant factor in the determinants of the HS12 commodities. However, colonial or official language ties were negatively signed and significant, implying that this was not a major contributor to trade in these commodities. The study recommends that favorable import and export promotion policies and trade openness to boost growth in the quantity of non-traditional exports should form part of government trade policies; and Nigeria should also take advantage of the proposed African Free Trade Area considering the gains she stands to make through proximity in distance.

Energy Consumption, Trade Openness and Economic Development of Some Major Oil-Producing Countries in Africa

To investigate the nexus between energy consumption, trade openness and economic development for seven oil-producing countries in Africa, this study employs the panel Autoregressive Distributive Lag (ARDL) techniques on data from 1971 to 2017. The Levin-Lin-Chiu, Pesaran-Shin and Breitung tests were used to ascertain the stationarity of the variables. The Hausman test showed that the mean group heterogeneous ARDL is the best technique to estimate the short and long-run relationship of the model. The result revealed that trade openness and the nature of energy consumed have significant impacts on economic development in the selected oil-producing countries. A percentage increase in trade openness decreases economic development by about seven precent but boosts development by twenty-eight percent. From the findings, it is recommended that policies be channelled to favour enabling environment, African free trade zone, economic freedom, private financial growth, ease of doing business, energy efficiency, renewable energy, carbon capture and storage, private property rights and security in Africa.

O acordo continental africano de livre comércio: esperanças e desafios

The signing of the Continental African Free Trade Agreement (AfCFTA), in 2018, can be considered a historic feat both in terms of the number of participating countries and the number of people and resources covered by it. However, historical problems regarding the African continent as a whole, added to the internal issues of member countries and the very magnitude of the agreement, pose considerable challenges to its effective compliance. Thus, the purpose of this article is to present the process of creating the AfCFTA, as well as to point out the various political and economic obstacles that can negatively affect its implementation.

Towards Macro-Economic Convergence in SACU: The Position of Botswana

In light of recent developments such as the African Continental African Free Trade Area agreement (AfCFTA), incrementalist approaches to regional inte gration that focus on sub-regions seems to have been pushed to the backburner as more focus puts the entire African continent at the centre of integration processes. With all its potential, gradual macro-economic convergence has accordingly been neglected. Discussions on macro-economic convergence have on the other hand been cast over the broader sub-region such as the Southern African Development Community (SADC) where a number of indicators and targets have been identified and pursued closely. Whilst looking at Botswana as a point of departure, this paper argues that incremental macro-economic convergence is pivotal to broader regional integration and the Southern African Customs Union (SACU) provides an ideal stepping-stone. An incrementalist approach to macro-economic convergence as well as broader regional integration should begin with identifying key formal institutions that serve as custodians of macro-economic policy such as the central banks and departments of finance or treasuries. Using secondary data sources, with Botswana as a case study, this paper foregrounds macro-economic convergence, macro-economic policy making institutions, and SACU as critical building blocks for broader regional integration.

Towards Macro-Economic Convergence in SACU: The Position of Botswana

In light of recent developments such as the African Continental African Free Trade Area agreement (AfCFTA), incrementalist approaches to regional inte gration that focus on sub-regions seems to have been pushed to the backburner as more focus puts the entire African continent at the centre of integration processes. With all its potential, gradual macro-economic convergence has accordingly been neglected. Discussions on macro-economic convergence have on the other hand been cast over the broader sub-region such as the Southern African Development Community (SADC) where a number of indicators and targets have been identified and pursued closely. Whilst looking at Botswana as a point of departure, this paper argues that incremental macro-economic convergence is pivotal to broader regional integration and the Southern African Customs Union (SACU) provides an ideal stepping-stone. An incrementalist approach to macro-economic convergence as well as broader regional integration should begin with identifying key formal institutions that serve as custodians of macro-economic policy such as the central banks and departments of finance or treasuries. Using secondary data sources, with Botswana as a case study, this paper foregrounds macro-economic convergence, macro-economic policy making institutions, and SACU as critical building blocks for broader regional integration.

China’s ‘Belt and Road Initiative’: Implication for Land Locked Ethiopia

This article analyses the Belt and Road Initiative (BRI) and its implications for landlocked Ethiopia. Primary and secondary data sources are used to solicit viable information. The BRI is aimed to enhance policy coordination, financial integration, promote trade and investment, cultural exchanges and people-to-people relations across a wide geographical area involving Asia, Europe and Africa. The BRI is the next step in China’s global strategy after the reform and opening-up period, and it is important for job creation, infrastructural development, trade and investment and other related developments for landlocked least developing countries such as Ethiopia. For instance, the construction of the early BRI project of Addis Ababa–Djibouti railway has reduced transport costs and shortened the transport time from 3 days to 10 hours. Besides, the establishment of the East African Free Trade Agreement (FTA) at Djibouti by the Chinese government to facilitate trade in the region. Cumulatively, the BRI contributes to the growth of trade and investment opportunities for landlocked Ethiopia in terms of financing, infrastructure development and regional integration.

Sovereign rating announcements and the integration of African banking markets

PurposeThe purpose of this paper is to examine the information spillover of sovereign rating changes on the market valuation of bank stocks in Africa.Design methodologyFirst, the authors apply event study methodology to evaluate the stock market reaction of African bank stocks on the announcement of sovereign rating changes. Second, the cross sections of the abnormal returns are examined by multivariate regression analyses. Third, the findings are proved for robustness.FindingsThe authors investigate how 37 African banks react to 203 African sovereign rating announcements from the three leading credit rating agencies over the period 2010-2016 and find that negative announcements trigger the significant positive stock reactions of African banks, especially contributed by banks in the non-reviewed African countries. These unusual reactions can be explained by the low integration and the severe information asymmetry of African capital markets. The authors further locate the influencing factors of banks’ reactions and show that rating downgrades magnify the abnormal effects while the membership of the African Free Trade Zone mildens the stock market reactions.Research limitations/implicationsLimitations are given by the limited sample size. There are only limited numbers of publicly listed African banks with sufficient trading data.Practical implicationsThe paper argues for a critical dependency of African bank equity valuation in the case of sovereign debt rating changes in neighbor countries. This observation is important for the risk assessment of African banking assets.Originality/valueThe paper is the first to examine stock market reactions on sovereign rating announcements for the evaluation of capital market integration in Africa. It thereby underlines the usefulness of this simply to apply approach as an instrument for ongoing examining the progress in capital market development in emerging countries.

Compulsory patent licensing and local drug manufacturing capacity in Africa

Africa has the highest disease burden in the world and continues to depend on pharmaceutical imports to meet public health needs. As Asian manufacturers of generic medicines begin to operate under a more protectionist intellectual property regime, their ability to manufacture medicines at prices that are affordable to poorer countries is becoming more circumscribed. The Doha Declaration on the TRIPS Agreement and Public Health gives member states of the World Trade Organization (WTO) the right to adopt legislation permitting the use of patented material without authorization by the patent holder, a provision known as "compulsory licensing". For African countries to take full advantage of compulsory licensing they must develop substantial local manufacturing capacity. Because building manufacturing capacity in each African country is daunting and almost illusory, an African free trade area should be developed to serve as a platform not only for the free movement of goods made pursuant to compulsory licences, but also for an economic or financial collaboration towards the development of strong pharmaceutical manufacturing capacity in the continent. Most countries in Africa are in the United Nations list of least developed countries, and this allows them, under WTO law, to refuse to grant patents for pharmaceuticals until 2021. Thus, there is a compelling need for African countries to collaborate to build strong pharmaceutical manufacturing capacity in the continent now, while the current flexibilities in international intellectual property law offer considerable benefits.