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Assessing Regional Integration in Africa V

Towards an African Continental Free Trade Area

image of Assessing Regional Integration in Africa V

This publication comes at a time of renewed enthusiasm for shortening the period of the vision of the Abuja Treaty. The publication’s overall objective is to provide analytical research that defines frameworks for African governments, the African Union and the Regional Economic Communities, towards accelerating the establishment of the African Common Market through: the speedy removal of all tariff and non-tariff barriers, obstacles to free movement of people, investments and factors of production in general across Africa, and through fast-tracking the creation of an African continental Free Trade Area.

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The African continental free trade area: An emperical analysis

Assessments of regional integration for developing countries do not always come to firm conclusions as to their benefits, and the evidence for Africa is mixed. This chapter therefore, using computable general equilibrium (CGE) modelling, carries out an exercise to determine the economic gains and losses from the envisaged African CFTA, and presents three main findings. First, eliminating the high tariff barriers prevalent across Africa by establishing the CFTA is expected to increase intra-African trade, which is likely to produce growth in real income. Second, these gains are expected to be significantly higher if complemented by additional trade-facilitation measures that reduce the cost of customs procedures and port handling. And third, although the potential economic benefits from the CFTA for Africa as a whole are encouraging, the gains are not distributed equitably across the continent.

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