Regarded as the first step towards the establishment of a continental free trade area afcfta, the commitment shown by african political leaders shows that the issue is receiving priority status. Intraafrican trade is key to sustainable development. Afcfta will be a game changer for stimulating intraafrican trade. Value of the exports and imports of the top ten african intraregional traders, 2015 million of u. The analysis of borders e ects in intraafrican trade emilie kinfack djoumessi alain pholo bala y august 23, 2017 abstract the study aims to analyze the border e ects on intraafrican trade through the use of a gravity speci cation based on the monopolistic competition model of trade introduced bykrugman1980. Jul 04, 2012 the need to enhance intra african trade among african countries led to the formation of the eaccomesasadc east african community. The issues paper is aimed at provoking the subject of low performance of intra african trade, raising as it were, the key issues why intra african trade is low. It will also expand intra african trade through better harmonization and coordination of trade liberalization. Is the african continental free trade area a game changer for the. A variety of empirical models are deployed for the purpose.
The analysis will highlight the commodity structure of the trade, the current flow of goods, the various obstacles to trade including tariff and nontariff barriers trade infrastructure and finance. Against this background, the economic development in africa report 20, subtitled intra african trade. Rather, we assume that a gravity equation reasonably explains intraafrican trade and we use it as the basis for our estimation of the missing flows. Action plan for boosting intraafrica trade united nations. Intraregional trade in subsaharan africa english abstract. Hindrances, opportunities and the continental free trade area. Economic obstacles to expanding intraafrican trade. The finding that trade among some african countries is too low implies that there are obstacles to such a trade. Implications of the african continental free trade area agreement has been prepared at a time when concerted efforts are being made across the continent by both sovereign and corporate entities to deepen economic integration. The strategic emphasis on intraafrican trade adopted by the bank and the african union provides the opportunity to foster the process of africas industrialization and eventually set the region on an export diversification path there is the increasing attention to the blue economy with its potential to promote intraregional trade. Intraafrican trade on agricultural commodities receives a boost. Regional integration and trade in africa springerlink.
The aim of the project is to help african countries to implement an integrated programme with regard to the promotion of trade and trade policies aimed at expanding intraafrican trade. Afreximbank appoints kanayo awani md for intraafrican trade. Intraafrican trade as a share of africas total trade would increase by about 50% over a 12year period, from 10. Trade among subsaharan african countries is very limited. The study aims to analyze the border effects on intraafrican trade through the use of. The need to enhance intraafrican trade among african countries led to the formation of the eaccomesasadc east african community. This study examines the potential for intraafrica trade and the prospects of advancing regional economic integration. But that is the objective of the boosting intraafrican trade biat. Accelerating growth through improved intraafrican trade brookings africa growth initiative 1 introduction. We should note, that there is a need to enhance the level of intraafrican trade, thereby making it an important driver of development and regional integration in africa as is the case in other regions of the world. Made in africa rules of origin for enhanced intraafrican trade.
Pdf this study examines the potential for intraafrica trade and the prospects of. The afcfta provides a framework and a tool for boosting intra african trade and industrialization on the continent. Against this background, the economic development in africa report 20, subtitled intraafrican trade. The analysis of borders effects in intra african trade. Can intraafrican trade unlock africas industrial potential. Intra africa trade the bilateral diplomatic relations between south africa and nigeria have for years been characterised in tandem by business cooperation and competition for continental dominance. The summit will focus on solutions to the numerous impediments that hinder intraafrican trade. The analysis of borders e ects in intra african trade emilie kinfack djoumessi alain pholo bala y august 23, 2017 abstract the study aims to analyze the border e ects on intra african trade through the use of a gravity. Intraafrican trade in context a frica, which covers approximately 30 million square. The potential for internal trade and regional integration in africa. Expanding intraafrican trade trademark east africa. While the share of intraafrican trade to the total. Intraafrican trade and the afcfta is nothing but a new wine in an old wine bottle which calls for caution as it may be a commodification of an old order and not a new practice to bring growth to african trade. The present study is scheduled as part of the implementation of the undp project raf73029a0140 on the development of intraafrican trade.
The aim of the project is to help african countries to implement an integrated programme with regard to the promotion of trade and trade policies aimed at expanding intra african trade. The african exportimport bank afreximbank today announced the appointment of kanayo awani as managing director of its intraafrican trade initiative. For african countries, intraregional trade can act as a key channel for enhancing the transformative power of trade. That means intraafrican trade creates more employment in the source country than africa trading with the rest of the world. The heart of it is one of africas unpopular institutions, namely. The promotion of intraafrican trade is the first pillar of the banks fifth strategic plan, informed by the view that intraafrican trade offers tremendous potential as a mitigant against adverse external shocks and global volatility. This fact, plus other political and economic considerations, has been used to motivate a growing number of regional integration schemes. Africa has phenomenal potential for intracontinental trade. Pdf john page presents a bigpicture view of intraafrican trade with a special emphasis on its role in the wider, global economy. Boosting intraafrican trade and deepening regional market integration constitute a necessary response to the challenges facing africa in the multilateral trading system and the global economy.
Modelling the economic impact of the tripartite free trade. The main objective of the action plan for boosting intra african trade is to reach 25% of the intra african trade currently, is 10% % through the regional integration. Unleashing the potential of women informal cross border. Common market for eastern and southern africa and the southern africa development community tripartite free trade agreement tfta, as well as to the proposed 2017 continental fta cfta between cairo and. An issues paper fleshing out key issues and challenges for enhancing intraafrican trade, including guidelines for fasttracking the continental free trade area. Au assembly of heads of state and government decreed, in 2012, the decision to boost intraafrican trade and fasttrack the continental free trade area cfta. However, this relies on a critical policy instrument the effective implementation of preferential trade liberalization among the members of the african continental free trade area. The 2018 edition of the african exportimport banks annual flagship report the african trade report titled boosting intraafrican trade. This study evaluates the economic impact of the proposed comesasadceac tripartite free trade area tfta on 26 african countries. Pdf the potential for intraafrica trade and regional integration. Implications of the african continental free trade area agreement has been prepared at a time when concerted efforts are being made across the continent by both sovereign and corporate entities to deepen economic integration and boost intra.
While international trade agreements such as african growth and opportunity act agoa and the recently announced economic partnership agreement between the european union and southern africa are positive for the continent and should. The bank was established in october 1993 by african governments, african private and institutional investors, and non african investors. Biat boosting intraafrican trade background the january 2011 au summit endorsed the recommendation of the 6th ordinary session of the au ministers of trade held in kigali from 29 october 2 november 2010 to fast track the establishment of a panafrican free trade, besides the january 2012 african union summit of heads of state and. An electronic version of the working papers can be downloaded from the.
Intraafrican trade as a percentage of total trade in africa 200620 14 table 2. The boosting of intraafrican trade and the deepening of africas market integration, by fostering competition among african countries, will assist. So the au decided, for now, to emphasis the creation of the continental free trade area, leaving aside the common market, and economic and monetary community. Yet, this is an issue given that it is widely accepted and established that.
The advent of the african continental free trade area represents a historic opportunity for the continent to boost intraafrican trade and accelerate structural transformation. The bank was established in october 1993 by african governments, african private and institutional investors, and nonafrican investors. New afreximbank strategy to increase intraafrican trade to. The african exportimport bank afreximbank is to implement a new strategy aimed at driving industrialization across africa and increasing intraafrican trade.
By 2015 africas population was already more than twice that of europe, at 1,186 million, but intraafrican trade was a paltry usd 170 billion 5%. Au assembly of heads of state and government decreed, in 2012, the decision to boost intra african trade and fasttrack the continental free trade area cfta. The main objectives of the afcfta are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the customs union. Pdf the potential for intraafrica trade and regional. The 2018 edition of the african exportimport banks annual flagship report the african trade report titled boosting intra african trade. They must improve their manufacturing base and strengthen the institutional structures required for trade policy to optimally foster intra african.
Trade between african countries has the greatest potential for building sustainable economic development and integration, says african economic outlook 2017, a flagship report of the african development bank released in ahmedabad on day 1 of its 52nd annual meetings, which commenced on monday in the indian city. Sadc has a revised regional indicative strategic development plan risdp 20152020 download pdf, which deals with industrialisation, regional infrastructure, agriculture and strategy. African continental free trade area afcfta legal texts. This report proposes an agenda to overcome the obstacles that have contributed to the stagnation at a low level of official intrasubsaharan african trade. How can intra african trade be exploited in order to improve economic productivity, especially industrial activity. For africa, a clear determination to expand trade among ourselves is an important step. African trade, largely because most african countries belong to the world trade organization wto, and so have ratified the articles of the general agreements on tariffs and trade gatt 1994, as well being signatories of regional trade agreements rtas. This study is set out to investigate the extent of how the. How has intraregional trade in africa evolved over time and how. Intraafrican trade on agricultural commodities receives a. It is especially important for the continents many small, noncoastal countries that face tremendous challenges trading internationally. Intraafrican trade stands at around 10 per cent compared to 60 per cent, 40 per cent, 30 per cent intraregional trade that has been achieved by europe, north america and asean respectively. Even if allowance is made for africas unrecorded informal crossborder trade, the total level of intraafrican trade is not likely to be more than. The potential for intraafrica trade and regional integration in africa.
The action plan for boosting intraafrica trade, as endorsed by the au summit, contains seven major clusters, the implementation of whose programmes and activities is aimed at addressing the key constraints and challenges of intraafrican trade and at significantly enhancing the size and benefits of the trade for the attainment of sustainable. The paper examines the possibility of expanding intraafrican. African governments want to achieve their objective of boosting intra african trade, they have to create more space for the private sector to play an active role in the integration process. Pdf intraafrican trade and regional integration researchgate. Apr 05, 2016 the african exportimport bank afreximbank is the foremost pan african multilateral financial institution devoted to financing and promoting intra and extra african trade. More emphasis needs to be placed on trade partnerships among african countries to drive seamless intraafrica trade, an economic survey has shown. Accelerating growth through improved intra african trade brookings africa growth initiative 1 introduction. While international trade agreements such as african growth and opportunity act agoa and the recently announced economic partnership agreement between the european union and southern africa are positive for the.
The action plan for boosting intra africa trade, as endorsed by the au summit, contains seven major clusters, the implementation of whose programmes and activities is aimed at addressing the key constraints and challenges of intra african trade and at significantly enhancing the size and benefits of the trade for the attainment of sustainable. The signing of the kigali declaration in march 2018 marks a significant shift in expectations for intra african trade. The african exportimport bank afreximbank is the foremost panafrican multilateral financial institution devoted to financing and promoting intra and extraafrican trade. May 23, 2017 world bank data reinforces the hypothesis that the levels of intraafrica are inadequate, between 2007 and 2011 intraafrican trade accounted for only 11% of africas total trade, the lowest of. New afreximbank strategy to increase intraafrican trade. Our results show an adverse effect of mismanagement of economic policy on intraafrican trade and not on extraafrican trade. Intraafrican trade, the african continental free trade area afcfta and the covid19. Infrastructure key to intraafrican trade africa renewal.
African governments want to achieve their objective of boosting intraafrican trade, they have to create more space for the private sector to play an active role in the integration process. Intraafrica trade, business and investment opportunities. A shift in expectations for intraafrican trade global. West african traders demand investments in roads, rails and telecom. In our framework, we do not explore whether intraafrican trade is low or what are its determinants. The present study is scheduled as part of the implementation of the undp project raf73029a0140 on the development of intra african trade. Nontariff barriers and other impediments to greater intra african trade are examined with reference to available literature and discussions the authors have had with. Intraafrican trade in context brookings institution. It uses the global trade analysis project gtap computable general equilibrium cge model and database to measure the static effects of the establishment of the tfta on industrial production, trade flows and consumption in the tfta.
This study examines the potential for intraafrica trade and the prospects of advancing. Intraafrica trade the key to boosting african economies. To unlock the potential of intra african trade and boost competitiveness, governments. To link to this object, paste this link in email, im or document to embed this object, paste this html in website. Intra african trade agreement reflect interconnected dynamism of options for africa. Since the latter counts for the largest share of african trade, it may be the case that the impact on total exports is weak as in fosu 2003. An issues paper fleshing out key issues and challenges for enhancing intra african trade, including guidelines for fasttracking the continental free trade area. Study on the identification of barriers and obstacles to. The fact that some of these countries are important in terms of regional gdp suggests that removing obstacles may help expanding intra african trade and, hence, initiate the growth spillovers. It is well known that intra african trade generates greater levels of industrial and valueadded goods than trade with other regions, which is typically dominated by lowervalue commodities.
Home ifpri publications intraafrican trade integration reference url share. This paper analyses intraregional trade and regional integration in selected regional groupings, with particular emphasis. The paper argues that intra african economic cooperation and integration has been poor as it fails to meet international standards. Awani will lead afreximbanks efforts to raise the level of intraregional trade in africa by 50 per cent in the next five years to reach a trade volume of. Pdf this study examines the potential for intraafrica trade and the prospects. Africas total trade has grown rapidly in value since around 2002, and has nearly doubled in the five years from 2009 to 2014. Uncertainties in international trade increase the premium on regional intra african trade. The potential for intraafrica trade and regional integration in africa conference paper pdf available september 2015 with 1,618 reads how we measure reads.
Intraafrican trade performance and regional integration. Overcoming the barriers for intraafrican trade to double in a decade can feel like a sisyphean task impossible to complete. Although many authors have shown that intrasubsaharan. The main objective of the action plan for boosting intraafrican trade is to reach 25% of the intraafrican trade currently, is 10% % through the regional integration the final aim is to create a continental market african common market. For these reasons, expanding intraafrican trade is a key to accelerating economic growth on the continent.
While it provides considerable statistical information on and a comprehensive account of the practical. Ecas modeling projects that by 2040, the afcfta will increase intraafrican trade in agricultural products by between 20 and 30 percent. African head of states and governments will convene in addis ababa, ethiopia later this month to launch a continentwide free trade agreement cfta. African continental free trade area afcfta legal texts and.
The analysis of borders effects in intra african trade economics. This study examines the potential for intra africa trade and the prospects of advancing regional economic integration through such trade. Index terms commodifcation, intraafrican trade, trade growth, regional organisations. In africa, for instance, the contribution of women informal traders to national gdp amounts to 64 percent of value added in trade in benin, 46 percent in mali and 41 percent in. We have gathered analysis and commentary from politicians, practitioners, scholars and experts and asked them to give us their analysis of the major bottlenecks on the road to regional integration in africa. Intraafrican trade, the african continental free trade area afcfta.