Browsing: Free Trade Africa

African leaders when they met to deliberate on the AfCFTA ooerationalistaion in 2018. www.theexchange.africa

One of the major criticisms raised against his ambitious continent-wide free trade pact is the fact that it is bound to have disproportionate benefits for different countries.  There are already pre-existing inequalities that favour more developed countries.

Bluntly speaking, it is to be reasonably expected that it is the continent’s tycoons, large business owners that will benefit the most.

Consider this, only three of the agreement’s members i.e. Nigeria, South Africa and Egypt account for almost half (50%) of all of Africa’s GDP. Take for instance the fact that in 2020 alone, the continent of Africa as a whole, imported US$20 billion worth of goods from South Africa.

With the tariff-free movement of goods, South Africa will enjoy a tremendous increase in trade output to the rest of the continent at much lower costs.…

Most economists see structural transformation as one of the main routes to Africa’s sustainable development. What it means is changing the share of agriculture, manufacturing and services in an economy. It is a central aim of the African Union’s Agenda 2063.

With this aim in mind, economists and policymakers need to know what determines structural transformation. They have flagged factors like demand for goods and services, trade policies, financial development, institutional quality and economic integration.

But researchers haven’t closely examined the way economic integration through trade and finance influences structural transformation.

I therefore set out to study African countries’ integration with the rest of the world and the effect of that integration on their structural transformation. This study provides fresh evidence about whether integration is good for Africa. It also unearths the right levels of integration necessary to increase structural transformation.

Trade and financial integration are both about countries exporting …