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

The document examines the AfCFTA, an agreement aiming to create a single market for goods, services, and investment across 55 African countries. It highlights potential gains such as a 52% increase in intra-African trade and a 4% rise in total exports, while identifying significant hurdles including poor infrastructure, non-tariff barriers, and varying levels of political commitment. The paper specifically discusses the tensions between larger economies and less-developed countries (LDCs) regarding tariff liberalisation and special and differential treatment, as well as the complexities of overlapping memberships in Regional Economic Communities (RECs). It concludes that the success of the AfCFTA depends on domestic implementation and the ability of AU members to align national interests with continental goals.

• The AfCFTA aims to address critically low intra-African trade, which has averaged between 12% and 14% of Africa's total trade basket over the last 20 years, largely due to a dependency on raw materials and low industrialisation.
• Simulations suggest that establishing the AfCFTA could increase total African exports by 4% ($25.3 billion) and raise intra-African trade by 52% ($34.6 billion) compared to a baseline of no trade reforms by 2022.
• Implementation faces significant structural and political obstacles, including poor infrastructure, lengthy customs procedures, non-tariff barriers (NTBs), and a lack of standardisation within Regional Economic Communities (RECs).
• To protect less-developed countries (LDCs) from the loss of tariff revenues and protect domestic industries, the AfCFTA includes special and differential treatment (SDT) and allows LDCs an extended implementation period of 13 to 15 years.
• The 'spaghetti bowl' of overlapping memberships in various RECs has historically led to low compliance and poor policy implementation, a challenge the AfCFTA seeks to resolve by using eight AU-mandated RECs as building blocks.
• Political commitment varies among key regional powers; for example, Nigeria initially declined to sign the framework agreement to protect national interests and avoid becoming a 'dumping ground' for finished goods, while South Africa's signing was delayed by domestic parliamentary procedures.
• There is a notable lack of focus on 21st-century trade issues such as e-commerce and digitalisation, as many AU members consider these discussions premature due to a lack of technical resources and existing regulatory frameworks.
• The AU is exploring self-financing for the AfCFTA and other operations through a proposed 0.2% levy on all eligible goods imported to the continent, though this is opposed by the US and Japan.

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} }