CAN THE AFRICAN CONTINENTAL FREE TRADE AREA OFFER A NEW BEGINNING FOR TRADE IN AFRICA?

This research paper examines the establishment and potential implementation of the African Continental Free Trade Area (AfCFTA), signed on 21 March 2018. It analyzes the projected economic gains, the challenges posed by varying levels of national development, and the political and technical hurdles that may impede the creation of a continent-wide free trade area.

• The AfCFTA aims to address critically low intra-African trade, which has averaged between 12% and 14% of the continent's total trade basket over the last 20 years. This low level of trade is attributed to a continued dependency on raw materials and low industrialization, with 60% of African countries relying on a maximum of five commodities for their exports.
• Successful implementation of the AfCFTA is projected to increase total African exports by 4% ($25.3 billion) and result in a 52% ($34.6 billion) increase in intra-African trade compared to a baseline of no trade reforms by 2022. Trade in industrial goods specifically is expected to grow by 53% between 2010 and 2022.
• Significant implementation hurdles include poor infrastructure, non-tariff barriers (NTBs), lengthy customs procedures, and the contentious issue of the free movement of persons. The latter is particularly difficult due to high domestic unemployment and securitization narratives, as evidenced by only 30 countries signing the Free Movement of Persons, Right to Residence and Right to Establishment agreement.
• To accommodate less-developed countries (LDCs), the AfCFTA includes special and differential treatment (SDT) applied on a case-by-case basis and allows LDCs an extended implementation period of 13 to 15 years. This is intended to prevent trade liberalization from harming smaller economies that rely heavily on tariff revenues.
• Political commitment varies among major economies; Nigeria did not sign the framework agreement or the Kigali Declaration, citing the need to protect national interests and avoid becoming a 'dumping ground' for finished goods. South Africa initially abstained from the framework agreement due to domestic parliamentary procedures but later signaled it would begin adoption processes.
• The AfCFTA faces a 'spaghetti bowl' of overlapping memberships in various Regional Economic Communities (RECs). While the AfCFTA recognizes eight AU-mandated RECs as building blocks, past attempts to reconcile these memberships, such as the Tripartite Free Trade Area (TFTA), resulted in a new FTA rather than the consolidation of the RECs.
• There is a notable lack of focus on 21st-century trade issues such as e-commerce and digitalization. Negotiators have shown reluctance to develop a continent-wide approach to e-commerce, with some AU members viewing such discussions as premature given their current development levels and lack of technical resources.
• Tariff liberalization remains contentious; while most countries accepted a 90% rate, seven countries—Zimbabwe, Madagascar, Malawi, Ethiopia, Djibouti, Sudan, and Zambia—requested a lower rate of 85%, which was granted on the condition they reach 90% within five years.

APA

Parshotam, A. (2018). CAN THE AFRICAN CONTINENTAL FREE TRADE AREA OFFER A NEW BEGINNING FOR TRADE IN AFRICA? South African Institute of International Affairs. https://saiia.org.za/wp-content/uploads/2018/06/Occasional-Paper-280.pdf

Chicago

Parshotam, Asmita. CAN THE AFRICAN CONTINENTAL FREE TRADE AREA OFFER A NEW BEGINNING FOR TRADE IN AFRICA? South African Institute of International Affairs, 2018. https://saiia.org.za/wp-content/uploads/2018/06/Occasional-Paper-280.pdf.

Wikipedia

{{cite report |last1=Parshotam |first1=Asmita |title=CAN THE AFRICAN CONTINENTAL FREE TRADE AREA OFFER A NEW BEGINNING FOR TRADE IN AFRICA? |publisher=South African Institute of International Affairs |date=June 2018 |url=https://saiia.org.za/wp-content/uploads/2018/06/Occasional-Paper-280.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{parshotam2018can, author = {Parshotam, Asmita}, title = {{CAN THE AFRICAN CONTINENTAL FREE TRADE AREA OFFER A NEW BEGINNING FOR TRADE IN AFRICA?}}, institution = {South African Institute of International Affairs}, year = {2018}, month = jun, url = {https://saiia.org.za/wp-content/uploads/2018/06/Occasional-Paper-280.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }