A Sceptics Guide to the African Continental Free Trade Area – and Why the Sceptics are Wrong…

ForumAfrica2019_Banner_Web 1140x137px_EN

By Andrew Mold, Acting Director, Office for Eastern Africa, Economic Commission for Africa, Kigali, Rwanda


This blog is part of a series marking the upcoming 
19th International Economic Forum on Africa 


Photo by Frans Van Heerden from Pexels
Photo by Frans Van Heerden from Pexels

Scepticism is never in short supply, generally speaking, and particularly in the era we are currently living through. This is often true when it comes to bold policy initiatives on the African continent. Yet I would argue that a lack of faith is certainly not warranted in the case of the African Continental Free Trade Agreement (AfCFTA).

Objections to the AfCFTA follow familiar lines. There are a series of misconceptions which underpin these objections:

“African countries all trade the same things”

Despite evidence of some diversification of exports occurring over recent decades, this is largely true; Africa is still heavily dependent on traditional export crops and commodities, reducing the scope for mutually beneficial trade. Yet this paints an excessively simplified view of trends in regional trade. Patterns of trade are changing rapidly. The traditional export market outside the continent of Africa (Europe, the United States and, increasingly, India and China) are of primary commodities, but the intra-regional component of trade is much more diversified, with high shares of non-traditional exports and manufactured goods, as illustrated by the case of the East African Community (EAC). Continue reading

Nigeria’s border closure: Why it will not pay off

ForumAfrica2019_Banner_Web 1140x137px_EN

By Léopold Ghins and Philipp Heinrigs, OECD Sahel and West Africa Club Secretariat


This blog is part of a series marking the upcoming 
19th International Economic Forum on Africa


rice-bodija-market-IITA-flickr
Men offload rice at Bodija market, Ibadan, Nigeria. Flickr/IITA

It has been three months since Nigeria closed its land borders and to date there are few indications as to when they will open again. The country said it wants to reduce the smuggling of goods and stop illegal inflows of Asian rice and outflows of subsidised fuel. More fundamentally, Nigerian authorities justify the closure by the need to support the domestic agricultural sector and accelerate national productivity growth.

The closure is badly affecting livelihoods in local border economies. In Benin, communities in areas close to the Seme border near the sea, or further up north near the Owode border, largely depend on Nigerian markets for their sustenance. The sudden shutdown has caused thousands of smallholder farmers to lose their produce and default on credits. In the Dendi region (an area that spans across northern Benin, Niger and Nigeria), economic networks are strongly integrated across borders. Small traders that live on these networks have lost their principal sources of income. Continue reading

How can the new African free trade agreement unlock Africa’s potential?

Print

By Professor Landry Signé, David M. Rubenstein Fellow in the Global Economy and Development Program and the Africa Growth Initiative at the Brookings Institution, Distinguished fellow at Stanford University’s Center for African Studies, Chairman of the Global Network for Africa’s Prosperity, and author of “Innovating Development Strategies in Africa: The Role of International, Regional and National Actors.


Learn more about this timely topic at the upcoming
18th International Economic Forum on Africa


Africa-TradeAfrica has an opportunity to show leadership on the world stage through strength in unity, as the rest of the world retreats from multilateralism and increases protectionism. For the first time in recent history, with the African Continental Free Trade Area (AfCFTA), Africa could wholly embrace intra-African relations, global trade, structural transformation and sustainable development. But for the agreement to succeed, businesses, which make up the backbone of the deal, need to be aware of their potential gains and be actively involved in its implementation, working alongside governments and regional institutions that are ultimately responsible for speeding up the process.

The challenges to African trade have been immense: Africa only represents 2.4% of total global exports. Intra-African trade only represents 15% of total African exports (compared to 58% and 67% for Asia and Europe, respectively), even if the regions of Eastern and Southern Africa are outperforming Central Africa.

The AfCFTA, launched with signatures from 44 African countries in March, has the potential to open up the free movement of goods, services and people, building the capacity of African businesses. If successfully implemented, the AfCFTA could generate a combined consumer and business spending of USD 6.7 trillion by 2030, accelerate industrial development, expand economic diversification, and facilitate quality job creation — including for youth (72% of poverty rate), women (majority of small-scale traders), and small and medium-sized enterprises (SMEs) (about 80% of regional employment).

But all this will depend on how well businesses are able to engage in the deal’s implementation. These are a few things they need to know:

Continue reading

Africa’s integration: groundbreaking but not so new

Print

By Sarah Lawan, Regional Co-operation Advisor, Networks, Partnerships and Gender Division, OECD Development Centre, and Rodrigo Deiana, Junior Policy Analyst, Europe, Middle East and Africa Unit, OECD Development Centre


Learn more about this timely topic at the upcoming
18th International Economic Forum on Africa


Kwame-Nkrumah
Kwame Nkrumah speaking at the inaugural ceremony of the Organisation of African Unity Conference in Addis Ababa, Ethiopia, in 1963

As early as 1963, in the midst of independence movements, Kwame Nkrumah urged, “Africa must unite or perish!” The first president of Ghana pronounced this injunction at the founding meeting of the Organisation of African Unity (OAU) in Addis Ababa, Ethiopia.

The post-colonial thirst for “breaking with the old order and indigenising the direction of Africa’s economic development”led to the shaping of the African Economic Community (AEC), a pan-African single market. Africa reclaimed its leadership and ownership with the goal of promoting a self-sustained and self-reliant development trajectory.

2018 witnessed an acceleration of integration efforts with the landmark agreement on the African Continental Free Trade Area (AfCFTA) in Kigali on 21 March. So far, 49 African countries have signed the AfCFTA, which will be the world’s largest free trade area since the WTO’s creation. As the late Calestous Juma put it: “The continent’s regional integration is the most complex and elaborate effort of its kind ever mounted in human history.”2

Continue reading