African Continental Free Trade Agreement – what can the AfCFTA add to trade liberalisation if the regional economic communities remain?
In 2018, only 15 per cent of Africa’s exports were intra-Africa, of which most were exports among African countries which are members of the same regional economic communities (RECs). This can be due to preferential tariffs applicable to intra-REC imports if the countries are party to the customs union or free trade agreement (FTA) of the REC, geographic proximity and supply-side factors.
In 2018, almost all intra-Africa imports into Zimbabwe and Eswatini were from other REC member states; of South Africa’s intra-Africa imports only 42 per cent were sourced from outside the Southern African Customs Union (SACU) and the Southern African Development Community (SADC), while imports by Niger, Gambia and Ivory Coast sourced from outside the Economic Community of West African States (ECOWAS) and the Community of Sahel–Saharan States (CEN-SAD) respectively accounted for only 8 per cent, 2 per cent and 9 per cent of the countries’ intra-Africa imports.
Given the importance of trade between existing REC member states, what can the African Continental Free Trade Agreement (AfCFTA) add to intra-Africa trade liberalisation if the RECs remain in place? The level of trade between African countries not part of the same regional arrangement is low, concentrated in limited tariff lines and often goods already imported duty-free.
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