Topics publications: African regional integration
Trade Briefs
Algeria’s Potential Value Chain Development under the AfCFTA
This trade brief explores the potential for AfCFTA-enabled regional value chain (RVC) development for Algeria, a North African country with significant value chain links with Europe but limited links with the rest of Africa. It overviews Algeria’s current global and regional value chain involvement and its potential approach to the AfCFTA. It then presents a data and visualisation-driven analysis of Algeria’s current global and regional value chain participation, before drilling into its Africa-specific value chain involvement: both backward and forward participation. Finally, it offers several conclusions relating to the potential for Algeria to both deepen and extend its intra-African regional value chain participation under the AfCFTA, and potentially advance its industrialisation drive.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
AfCFTA Update, August 2023
The implementation of the African Continental Free Trade Area (AfCFTA) Agreement may start soon. In this Update, we remind readers of what the legal instruments of the AfCFTA provide for in respect of its key features. Expectations about what will happen when implementation starts should be informed by what the State Parties accepted as new commitments, and what they want to retain from existing structures and regional agreements.
The questions in this Update are often asked in workshops and seminars. A few caveats should be listed before answering them:
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The quotes from the texts of the AfCFTA instruments provided below refer to provisions in the AfCFTA Agreement, which includes all the associated Protocols, Annexes and Appendices. This Agreement is in force but not yet implemented. Some matters must still be finalised.
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Economic integration makes sense in and for Africa. Many African countries are land-locked and/or have small domestic markets. Many are Least Developed Countries. The AfCFTA could, if properly implemented and accompanied by better trade-related governance, make an important contribution to boost intra-African trade, economic development, and trade governance. If this happens, trade with global partners will also be improved.
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Regional integration has been pursued under former African initiatives such as the Lagos Plan of Action and the Abuja Treaty. The AfCFTA is based on a new design. It explicitly preserves existing integration arrangements (through the principle of the acquis) and does not contain a linear integration scheme of things for the whole continent to become politically unified, as the Abuja Treaty does.
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New trade deals such as the AfCFTA can affect what is produced (static effects) and how it is produced (dynamic effects). All the parties to a trade in goods agreement stand to benefit from free trade because of new market access opportunities and increased demand. However, there will be winners and losers. The dynamic effects of trade agreements are important for overall success but may result in some firms being more efficient than others. Trade agreements create opportunities for new transactions but do not guarantee equal measures of success.
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The performance of firms in the AfCFTA State Parties will be affected by domestic policies. Appropriate domestic policies and sound trade governance are vital for the success of the AfCFTA. Industrialisation should be a priority in and among the AfCFTA State Parties.
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Although the objective of a trade agreement is to liberalise trade, the actual provisions are normally shaped by domestic and international political realities. Domestic and regional peace and stability are not to be overlooked when the benefits of trade deals such as the AfCFTA are discussed.
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The AfCFTA is not written on a clean slate. It will be implemented alongside existing regional trade arrangements and will be implemented by the same governments. The AfCFTA does not, for example, provide for a new approach to trade facilitation. It is assumed that this agreement will be properly implemented and soundly governed. If this does not happen, the perceived benefits will not materialise.
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Trade in services features prominently in the AfCFTA. It contains a separate Protocol on Trade in Services, with several Annexes and provides for Frameworks for Regulatory Cooperation. If it is expanded and domestic regulations are harmonised, it may well offer new benefits and deepen regional integration.
Trade Briefs
Mauritania’s Potential Value Chain Development under the AFCFTA
This trade brief explores the potential for AfCFTA-enabled regional value chain (RVC) development for Mauritania, a North African country but one that has moderate trade and value chain links with West African countries. It overviews Mauritania’s current global and regional value chain involvement and its effective offer to the AfCFTA. It then presents a data and visualisation-driven analysis of Mauritania’s current global and regional value chain participation, before drilling into its Africa-specific value chain involvement: both backward and forward. Finally, it offers several conclusions relating to the potential for Mauritania to both deepen and extend its intra-African regional value chain participation and potentially advance its industrialisation drive.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
Algeria and the African Continental Free Trade Area – opportunities and challenges
Algeria is classified as a lower-middle-income country, with a real gross domestic product (GDP) in purchasing power parity (PPP) of $488 billion and a GDP per capita (in dollars current) estimated at $3,691 in 2021. Rising oil and gas demand and prices have led to a strong recovery in hydrocarbon production and exports in 2021, which has sharply reduced budgetary and external financing needs. This led to GDP growth of 3.4% in 2021, after falling 5.5% during the Covid-19 pandemic in 2020. Real GDP growth moderated in 2022, reaching around 3%, and is expected to slow to 2.3% in 2023, due to limited oil production and the impact of the gradual recovery of the services and agriculture sectors.
This Trade Report focuses on Algeria’s international trading relationships and more specifically the African Continental Free Trade Area (AfCFTA) which was ratified by Algeria in June 2021. Algeria’s trade, industrial and investment policies are reviewed, including the various bilateral and plurilateral agreements that Algeria is party to. This is then followed by a look at Algeria’s trade performance, outlining its global trade and regional trade profiles. Value chain analysis follows with a focus on Algeria’s participation in regional value chains emanating from potential opportunities arising from the full implementation of the AfCFTA. Issues that Algeria needs to address to capitalise on the AfCFTA are highlighted.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Algeria and the AfCFTA – diversification and regional value chain participation
This Trade Brief gives a snapshot overview of Algeria’s global economic and trading environment. It is accompanied by an infographic highlighting key economic and trade indicators and forms part of a more detailed trade report published by tralac.
Algeria is categorised as a lower-middle-income country, with a real gross domestic product (GDP) purchasing power parity (PPP) of US$ 488 billion and GDP per capita (current US$) estimated at US$ 3 691 in 2021. The country has an unemployment rate of 12.7% of the total labour force (2021 latest available data) and 31.9% among youth (aged 15 to 24). The country’s heavy reliance on hydrocarbons (Petroleum products) makes its GDP growth highly sensitive to global petroleum prices. The hydrocarbons sector accounts for about 20% of GDP and about 90% of export earnings. There is a need for Algeria to reduce its dependence on oil and other hydrocarbons and diversify its export base to reduce the country’s vulnerability to external shocks.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
L'Algérie et la Zone de Libre Échange Continentale Africaine – opportunités et contraintes
L'Algérie est classée dans la catégorie des pays à revenu intermédiaire de la tranche inférieure, avec un produit intérieur brut (PIB) réel en parité de pouvoir d'achat (PPA) de 488 milliards de dollars et un PIB par habitant (en dollars courants) estimé à 3 691 dollars en 2021. L'augmentation de la demande et des prix du pétrole et du gaz a entraîné une forte reprise de la production et des exportations d'hydrocarbures en 2021, ce qui a fortement réduit les besoins de financement budgétaire et extérieur. Cela a conduit à une croissance du PIB de 3,4% en 2021, après avoir chuté de 5,5% pendant la pandémie de Covid-19 en 2020. La croissance du PIB réel s'est modérée en 2022, atteignant environ 3%, et devrait ralentir à 2,3% en 2023, en raison d'une production pétrolière limitée et de l'impact de la reprise progressive des secteurs des services et de l'agriculture.
Ce rapport sur le commerce se concentre sur les relations commerciales internationales de l'Algérie et plus particulièrement sur la Zone de Libre-Échange Continentale Africaine (ZLECAF) qui a été ratifiée par l'Algérie en Juin 2021. Les politiques commerciales, industrielles et d'investissement de l'Algérie sont passées en revue, y compris les divers accords bilatéraux et plurilatéraux auxquels l'Algérie est partie. Les performances commerciales de l'Algérie sont ensuite examinées, avec un aperçu de son commerce mondial et de ses profils commerciaux régionaux. L'analyse de la chaîne de valeur suit en mettant l'accent sur la participation de l'Algérie aux chaînes de valeur régionales émanant des opportunités potentielles découlant de la mise en œuvre complète de la ZLECAF. Les questions que l'Algérie doit aborder pour tirer parti de la ZLECAF sont ensuite mises en évidence et suivies d'une conclusion.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
L'Algérie et la ZLECAF – diversification et participation à la chaîne de valeur régionale
Cette brēf donne commerce un aperçu de l'environnement économique et commercial mondial de l'Algérie. La note est accompagnée d'une infographie mettant en évidence les principaux indicateurs économiques et commerciaux et fait partie d'un rapport commerce plus détaillé publié par tralac.
L'Algérie est classée dans la catégorie des pays à revenu intermédiaire de la tranche inférieure, avec un produit intérieur brut (PIB) réel en parité de pouvoir d'achat (PPA) de 488 milliards de dollars et un PIB par habitant (en dollars courants) estimé à 3 691 dollars en 2021. La forte dépendance du pays à l'égard des hydrocarbures (produits pétroliers) rend la croissance de son PIB très sensible aux prix mondiaux du pétrole. Le secteur des hydrocarbures représente environ 38 % des recettes budgétaires, 20 % du PIB et environ 90 % des recettes d'exportation. L'Algérie doit réduire sa dépendance à l'égard du pétrole et des autres hydrocarbures et diversifier sa base d'exportation afin de réduire la vulnérabilité du pays aux chocs extérieurs.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
La Mauritanie et la Zone de Libre Échange Continentale Africaine – défis et opportunités
La Mauritanie est classée parmi les pays à revenu intermédiaire de la tranche inférieure, avec un produit intérieur brut (PIB) par habitant en parité de pouvoir d'achat (PPA) estimé à 6 925 USD en 2022 par le FMI. En 2022, la croissance du PIB a atteint 5,3%, contre 2,4% en 2021, tirée par les secteurs de l'exploitation minière, de l'agriculture et de la pêche. Le secteur primaire, qui dépend fortement du minerai de fer et des produits de la pêche, emploie près d'un tiers de la main-d'œuvre du pays. Le pays possède également d'importants gisements d'or, de cuivre et de pétrole et de gaz. Les secteurs primaire et secondaire représentent respectivement 24% et 32% du PIB du pays, tandis que le secteur tertiaire représente environ 44% du PIB, les sous-secteurs des transports et des télécommunications étant les principaux contributeurs du secteur tertiaire. Le pays dispose d'un potentiel touristique, mais il n'a pas attiré d'investissements étrangers significatifs en raison d'un manque d'infrastructures et de cadres réglementaires.
Ce rapport sur le commerce se concentre sur les relations commerciales internationales de la Mauritanie et plus particulièrement sur la zone de libre-échange continentale africaine (ZLECAF) qui a été ratifiée par la Mauritanie en Février 2019. Les politiques commerciales, industrielles et d'investissement de la Mauritanie sont passées en revue, y compris les divers accords bilatéraux et plurilatéraux auxquels la Mauritanie est partie. Les performances commerciales de la Mauritanie sont ensuite examinées, avec un aperçu de son commerce mondial et de ses profils commerciaux régionaux. L'analyse de la chaîne de valeur suit en mettant l'accent sur la participation de la Mauritanie aux chaînes de valeur régionales émanant des opportunités potentielles découlant de la mise en œuvre complète de la ZLECAF. Les questions que la Mauritanie doit aborder pour capitaliser sur la ZLECA sont ensuite mises en évidence.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
La Mauritanie et la ZLECAF – tirer parti de l'agriculture dans la participation à la chaîne de valeur régionale
En 2022, la croissance du PIB a atteint 5,3%, contre 2,4% en 2021, tirée par les secteurs de l'exploitation minière, de l'agriculture et de la pêche. Le pays possède d'importants gisements d'or, de cuivre et de pétrole et de gaz. La dépendance du pays à l'égard des industries extractives rend la croissance de son PIB très sensible aux prix mondiaux des matières premières minérales. Le secteur des services représente environ 44% du PIB de la Mauritanie, les sous-secteurs des transports et des télécommunications étant les principaux contributeurs à ce secteur.
Dans le cadre des efforts du pays pour limiter sa dépendance aux matières premières, aux fluctuations des prix (fer, cuivre, or, quartz, bétail et poisson) et promouvoir la diversification, le gouvernement Mauritanien a élaboré une stratégie de croissance inclusive pour la période 2017-30, qui se concentre sur des réformes structurelles et des investissements significatifs dans les infrastructures. Cette stratégie repose sur trois piliers: la croissance économique inclusive, le développement du capital humain et l'amélioration de la gouvernance. La volonté de diversification de la Mauritanie est centrée sur la mise en place d'incitations à l'investissement pour les investisseurs étrangers.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
What have we learned from the AfCFTA Guided Trade Initiative?
During the 9th Meeting of the Council of Ministers held in July 2022, the Secretary General of the African Continental Free Trade Area (AfCFTA) Secretariat, H.E. Wamkele Mene, announced the AfCFTA Secretariat Guided Trade Initiative (GTI). In his keynote address, the Secretary General described the GTI as a solution-based approach intended to achieve its goal through matchmaking businesses and products for export and import between interested state parties. The GTI was formally launched at a ceremony in Accra, Ghana, on the 7th of October 2022.
The GTI is designed to enable the start of trading under the preferences of the AfCFTA Agreement among an interested group of State Parties that are certified as having met the minimum threshold for the start of commercial meaningful trade.
The legal basis for the implementation of the GTI of the is the Ministerial Directive 1/2021 on the Application of Provisional Schedules of Tariffs Concession issued on the 10th of October 2021. This provides the basis for the start of commercially meaningful trade under the AfCFTA preferential rules.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.