The African Continental Free Trade Area: Economic and Distributional Effects

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doi:10.1596/978-1-4648-1559-1

Cited by 52 publications

(12 citation statements)

References 17 publications

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“…The corresponding growth rate in trade volume of 111% per decade falls within the range of growth rates observed in past regional free trade agreements (Supplementary Figure 1). In line with previous assessments 26,44,45 , we find that tariff liberalization alone is not sufficient to mobilize intra-African trade (see Supplementary Methods for a detailed study comparison). It is the interaction between tariff elimination, import and export cost reduction, and reduction in intensive margin expansion costs, i.e.…”

Section: Resultssupporting

confidence: 91%

“…Previous studies provide a detailed account of the economic impacts of continental free trade 26,44,45 or the food security and climate change impacts of domestic agricultural development policies 11,46,47 in Africa, but assessments linking both levels are rare and, when combined, remain coarse 17,48 . Yet, agricultural productivity, and domestic and international market access jointly determine the competitiveness and location of agricultural production, and their interactions may critically influence the potential for trade across the continent and the broader sustainability impacts.…”

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A sustainable future for Africa through continental free trade and agricultural development

et al. 2022

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Developing and integrating agricultural markets may be key to address Africa's sustainability challenges. By modelling trade costs from farm-gate to potential import markets across eight African regions, we investigate the impact of individual components of continental free trade and the complementary role of domestic agricultural development through increased market access for farmers and agricultural intensification. We find that free trade would increase intra-African agricultural trade six-fold by 2030, butas it does not address local supply constraintsoutside food imports and undernourishment would reduce only marginally. Agricultural development could almost eliminate undernourishment in Africa by 2050, at only a small cost of increased global greenhouse gas emissions. While continental free trade will be enabled in Africa through the African Continental Free Trade Area, aligning this with local agricultural development policies will be crucial to increase intra-African trade gains, promote food security and achieve climate objectives. MainAgriculture plays a key role in ensuring a sustainable future for Africa. Currently, about 19% of the African population is undernourished 1 . Despite rapid growth in agricultural production in Sub-Saharan Africa since 2000 2 , food production did not keep up with increasing food demand thereby building up a high dependency on imports from outside Africa 3 . While international imports increase food availability and diet diversity 4 , they also imply risk from global market uncertainty 5 , especially for countries with high food insecurity and volatile export earnings 6 . Further, production growth in the past decades in Africa relied mainly on cropland expansion rather than yield intensification 2 , driving deforestation and related greenhouse gas (GHG) emissions 7 . Future food demand is expected to continue to grow rapidly in Africa as income increases 8 , the total population doubles 9 and the urban population almost triples 10 by 2050. Meeting this demand without increased import dependence or cropland expansion poses a major challenge 11,12 . In this context, the modernization and regional integration of agri-food systems can be key to eliminate hunger, ensure sustainable production growth and induce broader economic transformation in Africa 2,13-15 . In the past decades the modernization of developing countries' food systems lowered food prices and reduced seasonal variation in food supply 16 . Agricultural productivity growth under the Green Revolution in Asia, Latin America and Middle East tripled global crop production, while being land sparing and emission saving 17 . Improved access to domestic and international markets may in theory also reduce pressures on natural resources by relocating agriculture to the most productive areas, though impacts in the past decades have been negative instead due to deforestation and cropland expansion effects [18][19][20] . In Africa, there is still a huge potential to develop domestic agricultural markets and expand internati...

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confidence: 91%

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A sustainable future for Africa through continental free trade and agricultural development

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“…By reducing trade costs, countries will be able to join international value chains more easily [37]. Furthermore the AfCFTA aims at developing the manufacturing sector and diversifying the economy away from agricultural and natural resource-based economies and promote the development of the manufacturing sector [38,39]. Essentially, what remains at the heart of the AfCFTA is the building of cross-border value chains, exchanging regional industrial production and increasing its socio-economic welfare [40].…”

Section: The Appetite For the Afcftamentioning

confidence: 99%

The geostrategy of the African Continental Free Trade Agreement (AFCFTA) and third parties: a focus on China

Joseph

2022

Eureka: SH

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The primary objective of this article is to interrogate Sino-Africa Relations and questions if Africa a passive receiver of both Chinese and Western influence? This paper is divided into four sections. The first section of the paper outlines the African Continental Free Trade Agreement. It is followed by a discussion of the political factors, driving Africa's desire for greater integration. The second section explains the potential trade impacts of the AfCFTA on African states and illustrates the rationale and appetite for the AfCFTA. Section three examines bilateral relations with third-parties, with a focus on China, speculating about the future of Sino-African trade relations and the AfCFTA. Finally, section four concludes the study. The discussion and findings suggest the following. Firstly, that African officials perceive the role of China in a positive light, and China is seen as a fellow developing country. Secondly, African leaders laud China for its contribution to the growth of African nations. Thirdly, however, China is criticized for poor working conditions, China is seen to negotiate unfair deals and for some scholars China perpetuates the neo-colonial relationship and, in some countries, there have been violent protests against China. This study encompassed a qualitative, exploratory approach, which relied heavily on both primary and secondary sources of data.

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“…Globally, the cost of transfer is 6.67% of the amount sent (World Bank, 2020 [93]), but the cost of transferring remittances remains stubbornly high across the remittance corridors most used by fragile contexts (Figure 4.2). The average cost of transferring USD 200 is 25% higher to a fragile context than it is to developing contexts as a whole, with an average cost of USD 18.87 in extremely fragile contexts and USD 16.13 in other fragile contexts.…”

Section: Supporting Households and Causes Through Private Givingmentioning

confidence: 99%

“…The cost of transferring remittances to fragile contexts remains stubbornly highAverage cost of transferring USD 200 in 2020 Source: World Bank (2020[93]), Remittance Prices Worldwide (database), https://remittanceprices.worldbank.org/en.…”

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confidence: 99%

Financing in fragile contexts

Thompson¹

2020

OECD Development Co-Operation Working Papers

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The African Continental Free Trade Area: Economic and Distributional Effects

Cited by 52 publications

References 17 publications

A sustainable future for Africa through continental free trade and agricultural development

A sustainable future for Africa through continental free trade and agricultural development

The geostrategy of the African Continental Free Trade Agreement (AFCFTA) and third parties: a focus on China

Financing in fragile contexts

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