Mutambara Tsitsi Effie Rhodes University, Department of Economics and Economic History South Africa
Keywords : African Continental Free Area (AfCFTA); Inter-regional trade intensity index; Intra-regional trade intensity index.
The African Continental Free Trade Area (AfCFTA) is a continent-wide free trade area which is expected to pave way for a continental customs union. This article assessed the current state and extent of intra-Africa trade in 2001-2018. The results give insights into the foundation which the current regional economic communities in Africa have put in place regarding intra- and inter-trade linkages. This is a foundation which the AfCFTA would utilise to achieve trade integration in a continent-wide economic integration arrangement that seeks to improve intra-Africa trade. Five regional groups were considered, namely Arab Maghreb Union, East African Community, the Economic Community of West African States, Economic Community of Central Africa States, and the Southern African Development Community. Intra-regional trade intensity index results show that trade within individual regional groups, and within Africa, is oriented towards respective member countries, although there is no evidence of increased inward orientation over time. Inter-regional trade intensity index results show that most regional groups trade intensively with each other, albeit at different levels. With increased market access in the AfCFTA through lower trade resistances between regional groups, inter-regional trade is expected to increase as per the volume of trade criteria in the natural trading partners hypothesis.
Corresponding author: Mutambara Tsitsi Effie Email address for the corresponding author: t.e.mutambara@ru.ac.za First submission received: 11th of August 2024 Revised submission received: 18th of October 2024 Accepted: 5th of November 2024.
1. Introduction
The African Continental Free Trade Area (AfCFTA) is an initiative by African countries which will pave the way to establish a continental customs union. This initiative is expected to expand intra-African trade through better harmonisation and coordination of trade liberalisation, trade facilitation, and trade instruments across the existing regional economic integration arrangements and across Africa in general. Furthermore, it is expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better allocation of resources (UNCTAD, 2021; World Bank, 2020; South African Revenue Service, 2020; African Union et al., 2020; Traore, 2018). On 30 May 2019, the AfCFTA entered into force, 30 days after the deposit of the 22nd instrument of ratification, as specified in Article 23 of the Agreement. On 7th October 2022, the AfCFTA Secretariat launched the AfCFTA Guided Trade Initiative to allow commercially meaningful trade under the Agreement to commence for 8 participating countries (Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia). These countries represent five regions of Africa and are being used to pilot the operational, institutional, legal and trade policy environment under the AfCFTA (Tralac, 2023). From 30 May 2019 when the AfCFTA entered into force to the present, the AfCFTA is barely 5 years old. Therefore, accurately judging its effectiveness and the exact dynamics of trade between countries is currently constrained by this limited timespan of the AfCFTA. There are 55 countries in Africa, and all are members of the African Union. Each country is a member of at least one of the eight regional groups recognised by the African Union as crucial building blocks to establish the African Economic Community (African Union Commission, 2019; Nagar and Nganje, 2016; African Union Commission et al., 2016). These eight regional groups are the Community of Sahel-Saharan States (CEN-SAD), the Common Market for Eastern and Southern Africa (COMESA), the East African Community (EAC), the Economic Community of Central African States (ECCAS), the Economic Community of West African States (ECOWAS), the Intergovernmental Authority on Development (IGAD), the Southern African Development Community (SADC), and the Arab Maghreb Union (UMA).
Due to overlapping memberships, only five of the eight regional groups are considered in this research. These are the UMA which has been in place since 1988 and has five members; the EAC which was revived in 2000 and currently has six members; the ECCAS which has been functioning since 1985 and has 11 members; ECOWAS which has been in place since 1975 and has 15 members; and SADC which laid its foundation to focus on trade integration in 2000 and currently has 16 members. Other research like Bouët et al (2017, 2021), and Iapadre & Luchetti (2010) assessed the extent of regional intensity of trade and regional integration in Africa and conducted their respective analyses based on these five regional groups. Together, these five regional integration arrangements contain 49 out of the 55 countries in Africa. The countries that do not belong to any of these five economic integration arrangements are Djibouti, Egypt, Ethiopia, Eritrea, Sao Tome Principe, Somalia, and the Sudan.
2. Theoretical framework
The Natural Trading Partner Hypothesis argues that initial volume of trade and strong trade linkages between prospective member countries is important as noted by Marinov (2014:172), Khadan & Hosein (2013:5), World Trade Organisation & the United Nations Conference on Trade and Development (2012:28), and Shakur & Nees (2011:3078). Therefore, where countries intending to form a free trade area already trade disproportionately among themselves, a free trade area between them would reinforce the existing underlying trade patterns, thus, intra-regional trade is bound to increase upon its formation. Furthermore, the expected welfare benefits would be greater as there would be less scope for welfare reducing trade diversion. Therefore, if the assessment of the current regional intensity of trade in Africa shows high levels of regional trade introversion (i.e., high positive regional trade bias) with strong inter-regional trade links, this would indicate better possibilities for increased intra-African trade with the AfCFTA in place. This is because, in the AfCFTA, trade barriers will be reduced further, therefore enabling (i) easier access to markets for the respective comparative advantage goods, (ii) utilising more fully existing regional value chains and developing dynamic comparative and competitive advantages, and (iii) harnessing new trade opportunities to develop new regional value chains, as countries seek to harness more fully trade complementarities between regions. One of the first steps to assess trade effects of a regional integration arrangement is to assess the actual intensity of trade among the potential members before the formation of the integration arrangement. Since the AfCFTA is expected to expand intra-African trade, it is important to measure the intensity of trade among the proposed members by assessing the current state and extent of intra-African trade. The results are thus considered as an insight into trade integration and intra-African trade with the AfCFTA in place.
3. Methodology, Techniques and Procedures
Establishing the current regional intensity of trade in Africa was done using inter-regional trade indexes and intra-regional trade indexes. Inter-regional trade intensity was used to examine the extent to which regional integration arrangements in Africa currently trade intensively with each other. Intraregional trade intensity was used to examine the extent of trade introversion in the regional integration arrangements in Africa, i.e., whether their trade is more oriented towards their respective member countries rather than towards the rest of the world. The results of the assessment of the current regional intensity of trade can be considered as insights into the nature of trade integration and intra-Africa trade with the AfCFTA in place. Computations for the trade intensity indices were done using UNCTAD trade data available at https://unctadstat.unctad.org/EN/ To measure and examine regional intensity of trade in Africa, the trade introversion index (TIi), as noted by Hamanaka (2015:5), Iapadre & Luchetti (2010:4) or the bilateral revealed trade preference index (RTPij) as noted by Iapadre & Tajoli (2013:8) and Iapadre & Tironi (2009:9), was used. This is because the most widely used and well-known bilateral trade intensity index (Iij) (see Appendix 1A) and its variations have some limitations, viz. range variability, range asymmetry, and dynamic ambiguity, which must be corrected for. Range variability arises because the index is not homogeneous across regions as the range of its values and its maximum value are influenced by the size of the partner country (or region).
The range symmetry problem arises because the index is asymmetric around the geographic neutrality threshold of 1, resulting in biased assessments of changes in the index, depending on whether such changes occur above or below the geographic neutrality threshold. Dynamic ambiguity occurs when trade bias towards the partner country and the bias towards the rest of the world move in the same direction, thus, the indices will be conveying ambiguous information. The bilateral revealed trade preference index (RTPij) and the trade introversion index (TIi) are thus deemed robust and free of all the three limitations because all these limitations are corrected for (Hamanaka, 2015:2, 4-5; Iapadre & Tajoli, 2013:S93, 8; Iapadre & Luchetti, 2010:4-5; Iapadre & Tiron, 2009:7-10; Iapadre, 2006:68-71; Iapadre, 2004:7-9, 11-12, 14).
4. Results and Discussions
The indices were computed for the five regional integration arrangements, i.e., the UMA, the EAC, the ECCAS, ECOWAS and SADC. Some of ECCAS members are also members of EAC and SADC. Therefore, when indices were computed the countries with overlapping memberships were removed from the trade data for ECCAS, and the same was applied for trade data for Tanzania, as it is a member of both SADC and the EAC. The indices were computed for the period 2001-2018 as trade data were available for each regional group for this period. Throughout this period, the country composition of each regional group was kept as it was in 2001, regardless of the actual accession date of each member, to avoid distortions due to changes in the number of member countries. For example, the ECCAS was taken with 9 members and not 10, EAC was taken with 5 members and not the current 6; SADC was taken with 15 members and not the current 16; the UMA has 5 members; and ECOWAS has always had 15 members. Keeping membership constant is consistent with the approach taken by other authors, like Iapadre & Luchetti (2010) who carried out similar work on examining the regional intensity of trade in Africa’s regional integration arrangements. The trade introversion indices computed were used to establish and describe (i) the extent to which each regional group’s trade is oriented towards itself (i.e., intra-region orientedness or regional introversion); as well as (ii) trade introversion between regional groups to illustrate the current status of trade linkages between the five regional groups in Africa.
4.1 Intra-regional trade intensity within Africa’s regional groups (2001-2018) Table A-1 (Appendix 2) shows results for the trade introversion index (TIi) for each region, thus showing the extent to which each region’s trade is oriented towards itself. The results show that all regional groups (except the UMA) are highly inward looking when it comes to trade (intra-regional orientedness) throughout the period, with no sign of weakening. Comparatively, very high levels of intra-regional orientedness are found in the EAC and SADC, with introversion indexes of 0.98 ≤ TIi ≤ 0.99 and 0.90 ≤ TIi ≤ 0.94, respectively. Although still high, the levels of intra-regional orientedness are lower for ECOWAS and ECCAS with introversion indexes of 0.86 ≤ TIi ≤ 0.95 and 0.61 ≤ TIi ≤ 0.83, respectively. Thus, the EAC and SADC are relatively the most introverted (least extra-regional oriented) followed by ECOWAS. Throughout the period, the UMA is the only regional group that has low to moderate levels of intra-regional orientedness, with introversion indexes of 0.52 ≤ TIi ≤ 0.68, although its intra-regional orientedness seemed to slightly strengthen after 2013 as shown by its introversion indexes of 0.63 ≤ TIi ≤ 0.68. Thus, the UMA is the most extra-region oriented, as shown by the extra-regional homogeneous trade intensity index (0.978 ≤ HEi ≤ 0.984). These results are consistent with findings by Bouët et al (2021:37-38), Bouët et al (2017:59) and Iapadre & Luchetti (2010:5). Given African countries’ small shares and participation in world trade, intra-regional trade becomes more important, an observation also noted by Bouët et al (2017:55) and Iapadre & Luchetti (2010:3). Iapadre & Luchetti (2010:6) argued that the inability of the sub-Saharan Africa countries to participate successfully in extra-regional trade translated into relatively high trade introversion and that the regional trade introversion was relatively low in the UMA region mainly due to its more intense linkages with the European Union (EU). In their study, the UMA was the only African regional group that had a positive RTPij index with the EU, i.e. RTPij = 0.60 in 2000 and 0.48 in 2008.
A high trade introversion index can occur despite low intra- and inter-regional trade shares. Table A-2 (Appendix 2) shows that while the regional groups are highly inward looking when it comes to trade, as shown by the index (TIi), this does not necessarily mean that intra-regional trade is high. Table A-2 (Appendix 2) shows that intra-regional trade share (Si) for each regional group is quite low (i.e., 2.3% ≤ Si ≤ 3.2% for the UMA; 10.5% ≤ Si ≤ 14.1% for the EAC; 1.5% ≤ Si ≤ 3.1% for the ECCAS; 8.1% ≤ Si ≤ 11.6% for the ECOWAS; 14.1% ≤ Si ≤ 21.1% for SADC; and 11.2% ≤ Si ≤ 15.3% for Africa). Similar findings of low intraregional trade shares (Si) were found by Iapadre & Luchetti (2010) for the African regional groups they considered. Therefore, high trade introversion indexes (TIi) coupled with the low levels of intra-regional trade (Si) show, as argued by Iapadre & Luchetti (2010:8) that high intra-regional trade preferences, TIi (trade introversion), are not so much the result of deep and successful integration policies, but the unavoidable outcome of problems in extra-regional trade. Iapadre & Tajoli (2013:S94), Iapadre & Luchetti (2010:8) and Iapadre (2006:81; 2004:18) noted that even if the process of preferential integration was not particularly deep, a high trade introversion, as depicted by a high TIi, could occur due to developing countries’ trade opportunities being severely limited by protectionist trade policies in the rest of the world as well as structural problems that may limit the region’s members’ ability to participate more in the international trade network. Table A-2 (Appendices) shows that regional groups’ participation in world trade is very limited, as shown by their share of trade in the rest of the world (Vi) which has continued to be very low at less than 1%. Furthermore, it has also been observed that while traditional trade protection measures such as tariffs and quotas have been declining, these are being replaced by domestic technical regulations that permit countries to bar products from entering their markets if the required standards are not met. Nontariff measures (NTMs), particularly sanitary and phytosanitary measures (SPSs) and technical barriers to trade (TBTs) implemented by developed countries hurt exports from developing countries (Bouët et al., 2017:16; Mutume, 2006; Commission for Africa, 2005). Therefore, with limited market access to international markets, African countries have resorted to looking more to each other for trade than to the rest of the world, thus resulting in a high trade introversion.
An inward looking approach which thus serves to help foster a high trade introversion has been noted among the African integration arrangements through, (i) their resistance to Economic Partnership Agreements with the EU (Lagan, 2019; Ekeke, 2017; Woolfrey & Bilal, 2017; Hurt et al., 2013); (ii) a low degree of overall trade openness as evidenced by relatively low and often decreasing and even negative trade openness indicators (Bouët et al., 2017:5; Iapadre & Luchetti, 2010:9); (iii) Africa’s increasing loss of competitiveness relative to the rest of the world, and thus looking inward to regional trading partners (Bouët et al., 2017:5, 51); as well as (iv) the small number of trading partners and the low diversification of products exported to the rest of the world compared to more diversification in intra-African trade (Bouët et al., 2017:5, 51). Also to note is that where there is a ‘hub-and-spoke’ regional trade network, the importance of the ‘hub’ country for the rest of the region (the spokes) is greater than the importance of the spokes to the hub (Iapadre and Tajoli, 2013:S94). In this case therefore, a high trade introversion would emerge as ‘the spokes’ depend heavily on the hub for trade. This is evident in SADC where South Africa is the hub country (Mutambara, 2013; McCarthy, 1999). Furthermore, as per economic integration theory, trade creation and trade diversion effects of economic integration foster increased inward-looking regional trade (Appleyard and Field 2017; Lipsey, 1960), and this helps to facilitate high trade introversion. Thus, the forces driving towards global integration can be less strong than the trade-diverting and trade creating effects of regional integration.
4.2 Inter-regional trade intensity between Africa’s regional groups (2001-2018) The results for inter-regional trade intensity (RTPij) between the five regional groups are presented in Table A-3 (Appendix 2) and show that trade linkages between the regional groups vary with some regions being more closely linked than others. Similar findings were obtained by Iapadre & Luchetti (2010:6) for the period 1990-2008. The UMA has a negative trade bias (negative trade links) with both the EAC and SADC with -0.67 ≤ RTPij ≤ -0.06 and -0.4 ≤ RTPij ≤ -0.01, respectively, while it has positive trade bias towards both ECOWAS and the ECCAS, with 0.45 ≤ RTPij ≤ 0.70 and 0.14 ≤ RTPij ≤ 0.53, respectively. Its trade linkages with ECCAS were strong in the early years, i.e., 2001-2004, weakening thereafter. The UMA’s trade linkages with ECOWAS were at their strongest in 2004 and 2005. The UMA had a negative trade bias towards Africa for most of the period. However, in the last few years, it has shown a positive trade bias towards Africa although these trade linkages are very weak as evidenced by the very low indexes of -0.07 ≤ RTPij ≤ 0.15. Therefore, trade links with regions outside Africa are more important to the UMA. The EAC, ECCAS and SADC have very strong trade linkages with each other. Furthermore, the EAC and the ECCAS have strong trade linkages with Africa (with 0.55 ≤ RTPij ≤ 0.75 and 0.50 ≤ RTPij ≤ 0.64, respectively) thus reflecting a positive regional bias. However, unlike the EAC and the ECCAS who have strong trade links with Africa, SADC has weak trade links with Africa in general, with 0.14 ≤ RTPij ≤ 0.37. ECOWAS has very strong trade links the ECCAS and SADC (with 0.84 ≤ RTPij ≤ 0.98 and 0.74 ≤ RTPij ≤ 0.91, respectively). However, ECOWAS has very weak and mostly negative trade linkages with the EAC as shown by -0.4 ≤ RTPij ≤ 0.23, except in 2004 and 2005 where 0.50 ≤ RTPij ≤ 0.59 which shows moderate trade linkages. Its trade links with the Africa are moderate with 0.33 ≤ RTPij ≤ 0.59. 4.3 Implications of trade intensity for intra-Africa trade with the AfCFTA in place Some regional groups, i.e., SADC-EAC-ECCAS as well as ECCAS-ECOWAS-SADC currently have very strong trade linkages with each other, and as such already trade intensively with each other. Therefore, as per the Natural Trading Partner Hypothesis, the AfCFTA would reinforce and enhance their existing strong trading relations which would strengthen trade between them. With improved market access, logistics and awareness of trade opportunities due to the AfCFTA, these regional groups would be able to examine and explore more fully (i) the regional value chains opportunities already developed in their markets; (ii) developing and harnessing new regional value chains opportunities that may emerge; and (iii) harnessing emerging opportunities for joint production given the overlapping areas of comparative advantage between the regional groups. All this will be in line with Part II Article 3 of the Agreement establishing the AfCFTA. EAC-ECOWAS currently have weak trade linkages, AMU has negative trade linkages with both the EAC SADC, while the AMU has moderate trade linkages with both the ECCAS and ECOWAS. With the AfCFTA in place and improved market access into each other’s markets, these regional groups would be able to investigate and explore (i) trading opportunities to improve trade relations with each other; (ii) opportunities to develop regional value chains between other; and (iii) existing non-tariff barriers between them and how these could be resolved to improve their trade linkages. Improving inter-trade between these regions would have a positive impact on raising intra-Africa trade. Easier market access in the AfCFTA would help regional groups to focus on utilising the dynamic effects of economic integration. The trade intensity indexes show that a relevant foundation already exists regarding strong trade linkages between most regional groups in Africa. This foundation could be strengthened and utilised more fully and enhanced by a functioning AfCFTA. Co-ordinating and harmonising tariff and non-tariff systems with a view to establish a seamless continental movement of goods, as per the AfCFTA, would improve intra-Africa trade. While trade-facilitating measures have been put in place to promote intra-Africa trade, it has been observed that there are other trading costs that slow down trading across borders. United Nations Economic Commission for Africa (2019:22) and Bouët et al (2017:17, 26, 88) observed that trading costs in Africa are still relatively high, with such costs arising mainly from transportation costs due to inadequate and unreliable communication and transport infrastructure; documentary compliance costs; and border compliance cost which arise from inefficiencies in documentary and border compliance procedures in the various regions. Despite the strong trade linkages, such trading and transaction costs would have implications for the accessibility of markets in the AfCFTA.
4.4 Implications of inadequate and unreliable communication and transport infrastructure It has been argued that when it comes to linking countries, the current transport infrastructure is generally inadequate and falls short. Therefore, investment in infrastructure to ensure better and more efficient infrastructure is needed to increase intra-African trade and support the AfCFTA. To close Africa’s huge infrastructure gap, the African Union Commission (2019:12) noted that the Programme for Infrastructure Development in Africa (PIDA) was launched in 2021 to develop a regional and Continental vision, policies, and strategies for infrastructure development. African Union et al (2020:31) observed that strong economic links in trade, finance, production, and social development were dependent on welldesigned and well-connected infrastructure, and therefore, strategies to address the infrastructure deficit were urgent. Table A-4 (Appendix 2) shows that the infrastructure dimension of the African Regional Integration Index has very low scores for the different regional groupings averaging 0.220 in 2019. African Union et al. (2020:31) noted that many countries’ score were near zero and the infrastructure of 31 countries was poorly integrated, and that only 11 African countries had infrastructure that was moderately well integrated in their region. Therefore, failing to adequately address the Continent’s infrastructure deficit would hamper regional economic and social integration because production would be constrained due to (i) a lack of intermediate inputs and raw materials; (ii) goods would not reach consumers timeously; and (iii) trade and financial activities either within or across borders would be compromised (African Union et al., 2020:18). The results have shown that trade linkages between some of the regional groups are weak. Therefore, adequate infrastructure is essential to strengthen and to facilitate the current inter-regional trade linkages between regional groups, and thus enhance regional integration as well as to improve inter-regional trade. The UMA has the weakest trade links with the other regional groups, as well as an overall negative trade bias with the African Continent, making the UMA a relatively isolated sub region in Africa compared to the other sub regions. Infrastructure development at a Continental level could benefit this regional group by helping it to connect more easily with the rest of the Continent, because African Union Commission (2019:xiv, 122, 123) noted that the UMA continued to experience limited infrastructure links which have led to persistent high intra-Maghreb transport and communication costs. The EAC, ECCAS and SADC have very strong trade linkages with each other while ECOWAS, ECCAS and SADC also have very strong trade linkages with each other. Improved and well-developed infrastructure would strengthen further these trade linkages. Furthermore, the linkages could be strengthened by unbundling some of the production from national boundaries and engaging in joint production. However, this would greatly depend on functioning logistics and operational transport infrastructure and foreign direct investment flows to locations with cost advantages; and thus, poor infrastructure would be a major deterrent. Involving the private sector and establishing innovative variants of public-private partnerships would attract additional private capital and expertise for infrastructure development.
4.6 Implications of functioning financial markets African Union et al (2020:30), the United Nations Economic Commission for Africa (2019:29) and the African Union Commission (2019:79) noted that without functioning financial markets, trade would be constrained, which maked financial integration an inherent part of trade and regional integration. Table A4 (Appendix 2) shows that the regional groups have average (or moderate) scores for the Financial and macroeconomic integration dimension (0.4 ≤ score ≤ 0.68), except for the EAC which has a high score of 0.79 in 2019. However, African Union et al (2020:30) and African Union Commission (2019:79) also observed that the individual country scores varied greatly, and were mainly driven by exorbitant inflation in some countries. In some countries, the financial sector was stable and solid, but in others, there were low savings rates, underdeveloped bond markets and a limited investor base, the absence of a modernised payment system and the lack of cross-border supervision of financial transactions. African Union et al (2020:30) recommended that the Continent should prioritise and implement coordinated fiscal and monetary policies to have a stable economic climate, which would in turn attract increased cross-border investment and enhance macroeconomic integration. The United Nations Economic Commission for Africa (2019:29) noted that ensuring functioning financial markets which are well integrated would facilitate less costly cross-border capital flows, help stabilise budget deficits, limit exchange rate volatility and control inflation in a region. Developing and strengthening both local and regional capital markets would also help to raise funds for the efficient funding of infrastructure, as noted by the African Union Commission (2019:125). Functioning and well-integrated financial markets would strengthen and facilitate current interregional trade linkages and thus the overall intra-Africa trade and trade integration. This is because for trade linkages to harnessing more fully existing trade opportunities and new ones which emerge with improved market access, would require financial and non-financial services of stable financial markets. Furthermore, for current inter-regional trade linkages to be strong enough to consolidate current regional value chains and to develop and harness new regional value chains, financial markets that facilitate monetary policies that promote a stable economic climate are key. This is because this would in turn attract increased cross-border investment to harness regional value chains and enhance macroeconomic integration.
Conclusion
The regional trade introversion indexes show that all regional groups (except the UMA) are highly inward looking when it comes to trade (intra-regional orientedness) with no sign of weakening. Protectionist trade policies in the rest of the world and structural problems that may limit the ability of individual countries to participate more in the international trade network contribute to high trade introversion. Trade creation and trade diversion effects of economic integration also foster increased inward-looking regional trade as member countries reciprocate preferential trade treatment to each other, thus making the regional groups’ overall trade policies more inward looking. Trade linkages between the regional groups vary with some regions being more closely linked than others. AMU has positive trade linkages with both ECOWAS and the ECCAS while the EAC, ECCAS and SADC have very strong trade linkages with each other. Improved and well-developed adequate infrastructure would strengthen and facilitate the current inter-regional trade linkages between regional groups, and thus enhance regional integration as well as to improve inter-regional trade. Furthermore, given the constraints of the small domestic markets in each regional group, the AfCFTA would create the benefits from economies of scale inherent in larger regional markets. This would help to improve intra-African trade as firms in the various regional groups would be motivated to produce more to benefit from the enlarged market. A wider variety of cheaper goods produced as countries develop new areas of comparative advantage and utilising economies of scale, would also help to improve intra-Africa trade as such varieties become more easily accessible due to the reduced trade barriers. Functioning, welldeveloped and integrated financial markets, free movement of people and skilled labour, and reducing communication and transport infrastructure bottlenecks would reduce trading and transaction costs, thereby facilitating intra-Africa trade. From the time the AfCFTA entered into force in May 2019 to the present, the AfCFTA is barely 5 years old. Therefore, empirically judging the effectiveness of the AfCFTA and exact trade dynamics between countries in terms of, for example, trade creation, trade diversion, and the net effect of the AfCFTA is currently constrained by the limited timespan of the AfCFTA.
References
African Union Commission. 2019. 2019 African Regional Integration Report: Towards an integrated and prosperous and peaceful Africa, Addis Ababa (Ethiopia). African Union, Africa Development Bank, and United Nations Economic Commission for Africa. 2020. Africa Regional Integration Index Report 2019. AU, ADB, UNECA. African Union, Africa Development Bank and United Nations Economic Commission for Africa. 2019. Africa Regional Integration Index (ARII) 2019 Technical Report. AU, ADB, UNECA. African Union, Africa Development Bank and United Nations Economic Commission for Africa. 2016. Africa Regional Integration Index Report 2016. AU, ADB, UNECA. Appleyard, D.R. and A.J. Field, 2017. International Economics. 9e. McGraw-Hill Education, New York. Bouët, A., A. Sy, and F. Traoré. 2021. “Diagnostic of trade policies, measures and instruments on agriculture in West Africa.” Report for the FARM-TRAC Project. Markets, Trade and Institutions Division (MTID), International Food Policy Research Institute. Bouët, A., L. Cosnard, and D. Laborde. 2017. “Measuring Trade Integration in Africa.” IFPRI Discussion Paper 01667. August 2017. Commission for Africa. 2005. “Our Common Interest: Report of the Commission for Africa. March 2005 Report of the Commission for Africa.” [Online]. Available: https://reliefweb.int/sites/reliefweb.int/files/resources/Full_Report_1461.pdf [Accessed on 28 January 2022]. Ekeke, A.C. 2017. “The potential effect of the economic partnership agreements between EU and Africa on Article 22 of the African Charter.” De Jure Law Journal 50(2):303-323. http://dx.doi.org/10.17159/2225-7160/2017/v50n2a6 Hamanaka, S. 2015. “The selection of trade integration indicators: Intraregional share, Intensity, Homogeneous intensity, and Introversion Index.” ADB Economics Working Paper Series, No. 455. [Online]. Available: http://hdl.handle.net/10419/128569 [Accessed 20 January 2020]. Hurt, S.R., D. Lee, and U. Lorenz-Carl. 2013. “The Argumentative Dimension to the EU-Africa EPAs.” International Negotiation 18(1): 67-87. http://dx.doi.org/10.1163/15718069-12341250 Iapadre, L., and F. Luchetti. 2010. “Trade Regionalisation and Openness in Africa.” EUI Working Paper RSCAS 2010/54. Iapadre, L., and F. Tironi. 2009. “Measuring trade regionalism: The case of Asia.” UNU-CRIS Working Papers. W-2009/9. United Nations University – Comparative Regional Integration Studies, BE – Belgium. Iapadre, P.L., and L. Tajoli. 2013. “Emerging countries and trade liberalisation: A network analysis.” Journal of Policy Modelling 36S (2014): S89-S110. Iapadre, L. 2006. “Regional integration agreements and the geography of world trade: Statistical indicators and empirical evidence.” In: P De Lombaerde (ed). Assessment and Measurement of Regional Integration. Routledge, OXON OX14 4RN. 67-85. Iapadre, L. 2004. “Regional integration arrangements and the geography of world trade: Measurement problems and empirical evidence.” UNU-CRIS e-Working Papers. W-2004/3. United Nations University. Khadan, J. and R. Hosein. 2013. “New empirical insights into the “Natural Trading Partner” Hypothesis for CAROCOM Countries.” Munich Personal RePEc Archive (MPRA). MPRA Paper No. 50493. [Online]. Available: http://mpra.ub.uni-muenchen.de/50493/ [Accessed 9 April 2019]. Lagan, M. 2019. Why Europe urgently needs to rethink its unfair trade deals with Africa. Dialogue of Civilizations (DOC) Research Institute. [Online]. Available: https://doc-research.org/wp-content/uploads/2019/04/Langan_Fairertrade-in-Africa.pdf [Accessed 15 January 2022]. Lipsey, R.G. 1960. “The theory of customs unions: A general survey.” The Economic Journal 70(279): 96-513. Marinov, E. 2014. “Economic integration theories and the developing countries.” MIPRA Paper No. 63310, September: 164-177. Munich Personal RePEc Archive (MPRA). McCarthy, C.L. 1999. “Polarised development in a SADC Free Trade Area.” South African Journal of Economics 67(4): 375410. Mutambara, T.E. 2013. “Examining South Africa’s trade with the Southern African Development Community (SADC) with the SADC Free Trade Area initiative in place.” MIBES Transactions International Journal Volume 7 (2013): 6378. Mutume, G. 2006. “New barriers hinder African trade – Health standards in rich countries limit continent’s ability to export.” [Online]. Available: https://www.un.org/africarenewal/magazine/january-2006/new-barriers-hinderafrican-trade [Accessed on 18 January 2022]. Nagar, D., and F. Nganje. 2016. The African Union: Regional and global challenges. Centre for Conflict Resolution. Shakur, S. & Nees, C. 2011. “An application of the natural trading partner hypothesis to New Zealand-ASEAN trade.” Economics Bulletin 31(4): 3077-3088. South African Revenue Service. 2020. “Part 8: Agreement Establishing the African Continental Free Trade Area.” Government Gazette No. 44049 No. R. 1433. Date: 2020-12-31. Tralac. 2023. Status of AfCFTA Ratification. [Online] Available at https://www.tralac.org/resources/infographic/13795-status-of-afcfta-ratification.html [Accessed on 30 April 2024]. Traore, D. 2018. “African Continental Free Trade Area-Objectives, Challenges and Perspectives.” Presentation at PEGNet Conference. Cotonou-Benin 11 and 12 October 2018. United Nations Economic Commission for Africa. 2019. Making sense of regional integration indexes: A guide to better understand and use the information contained in regional integration indexes. ARII User Guide. African Trade Policy Centre (ATPC) of the ECA. UN Economic Commission for Africa (2019). [Online]. Available: https://arii.uneca.org/Reports/en-US/ARII_UserGuide_2019.pdf [Accessed 12 January 2022]. United Nations Conference on Trade and Development (UNCTAD). 2021. Implications of the African Continental Free Trade Area for Trade and Biodiversity: Policy and Regulatory Recommendations UNCTAD/DITC/TED/INF/2021/3. Woolfrey, S., and S. Bilal. 2017. “The impact of Economic Partnership Agreements on the development of African value chains Case studies of the Kenyan dairy value chain and Namibian fisheries and horticulture value chains.” Discussion Paper ECDPM – EUROPEAN CENTRE FOR DEVELOPMENT POLICY MANAGEMENT No. 213. June 2017. www.ecdpm.org/dp213 World Bank. 2020. The African Continental Free Trade Area: Economic and Distributional Effects. International Bank for Reconstruction and Development / The World Bank 1818 H Street NW, Washington, DC 20433. World Trade Organization (WTO) and the United Nations Conference on Trade and Development (UNCTAD). 2012. A practical guide to trade policy analysis. WTO, UNCTAD.
