1st Edition
Making the African Continental Free Trade Agreement a Success Pathways and a Call for Action
In 2019, African heads of state and governments launched in fanfare the African Continental Free Trade Agreement (AfCFTA), a historic agreement for economic transformation across the continent. But now comes the hard bit: how to make the agreement a success?
In this book, senior experts from across the world come together to provide a comprehensive analysis of the conditions needed for AfCFTA to successfully spur economic development in Africa. It puts forward three foundations for success: demography dividend, digital economy, and economic diversification. In addition to trade policy, the book recommends that African policymakers should strengthen fiscal and monetary policy coordination, adopt and implement the appropriate regulatory environment, and build suitable connectivity infrastructure. The stakes are high. If implemented correctly, the book argues that AfCFTA could speed up trade within Africa, which could double every five years. Success would mean growth, investment, changing trade patterns, jobs, economic transformation, poverty reduction, and a continental market for services.
Driven by concrete, evidence-based strategies for long-term growth, this book is an essential read for policy makers, development practitioners, economics researchers, and everyone with an interest in the future of Africa.
Foreword
Wamkele Keabetswe Mene
Chapter 1: Making the AfCFTA a Success: Potential, Pathways, and Call for Action
Albert G. Zeufack, Fulbert Tchana Tchana, and Aly Sanoh
1.1. Introduction
1.2. What would success look like?
1.3. Three foundations to achieve success: demography, digital, and diversification
1.4. Call for Action to Achieve Success
Chapter 2: Africa’s Trade patterns—Trends and Benchmarking
Constant Lonkeng Ngouana
2.1. Introduction
2.2. Who has Africa Traded with Historically?
2.3. What does Africa trade?
2.4. Potential in the Horizon—Convergence in Export Sophistication
2.5. Conclusion and Policy Implications
Chapter 3: Long-term growth impact of a well-functioning AfCFTA for the continent and by sub-region: a comparative analysis based on historical experience
Mama Keita
3.1. Introduction
3.2. Growth and socio-economic impacts of the AfCFTA
3.3. Examples of Successful promotion of long-term growth and how can AfCFTA help achieve similar results: A historical perspective
3.4. Africa’s Growth performance in the past three decades
3.5. Conclusion and recommendations
Chapter 4: The Africa Continental Free Trade Area and Poverty Reduction in Africa
Clarence Tsimpo, Aly Sanoh, and Mohamed Coulibaly
4.1. Introduction
4.2. How has Africa fared so far?
4.3. A profile of poverty in Africa
4.4. Keys constraints to poverty reduction in Africa
4.5. How will the AfCFTA affect constraints to poverty reduction in Africa?
4.6. Poverty impact of the AfCFTA
4.7. Conclusion
Chapter 5: AfCFTA: What it means for AGOA, EBA and trading with Asia?
Souleymane Coulibaly, Natnael Simachew Nigatu, Angella Faith Montfaucon
5.1. Introduction
5.2. The Legacy of Non-Reciprocal Preferential Trade Agreements
5.3. The Prospects of the African Continental Free Trade Agreement
5.4. The Prospect of Trade and Investment with Asia
5.5. From Political Non-Reciprocal PTA to Reciprocal Private Trade and investment
5.6. Conclusion
Chapter 6: Lessons from African RECs: for a successful AfCFTA
Woubet Kassa and Pegdéwendé Nestor Sawadogo
6.1. Introduction
6.2. Regional Economic Communities (RECs) in Africa: Evaluating their Impact on Trade
6.3. Lessons and Challenges in transitioning from RECs to AfCFTA
6.4. Conclusion
Chapter 7: Fiscal policies coordination to the success of the AfCFTA
Fulbert Tchana Tchana
7.1. Introduction
7.2. Analytical framework
7.3. Analysis of findings from regional value chain and economic integration process
7.4. Lessons from other development zones
7.5. Conclusion -- Fiscal policy road map for economic convergence in Africa
Chapter 8: Monetary policy harmonization for AfCFTA
Constant Lonkeng and Fulbert Tchana Tchana
8.1. Introduction
8.2. Optimal Currency Area
8.3. Estimating the Trade Benefits of Sharing a Common Currency
8.4. Lessons from the European Economic Community and ECOWAS journey toward Monetary Union
8.5. A case for convergence criteria, monetary and financial policy harmonization
8.6. Conclusion
Chapter 9: Transport Policies for a Successful AfCFTA
Théophile Bougna
9.1. Introduction
9.2. The Continental Transport Infrastructure gap
9.3. Current State of Transport Infrastructure in Africa
9.4. Can the current state of Africa transport infrastructure boost the AfCFTA?
9.5. Conclusion and Policy Recommendations
Chapter 10: Industrialize Africa by leveraging on its natural resources: The AfCFTA to be a game changer
Komi Tsowou
10.1. Introduction
10.2. The imperative for African economies to add values to their natural resources
10.3. Industrialization and trade liberalization: theoretical underpinning and empirical evidence
10.4. Promoting value addition to natural resources under the AfCFTA
10.5. Conclusion and policy messages
Chapter 11: Upgrading Skills for Africa’s Economic Transformation
Vincent Belinga and Kolobadia Ada Nayihouba
11.1. Introduction
11.2. Skills and participation in global value chains
11.3. Skills for integration in the agribusiness value chains
11.4. Skills for the manufacturing value chains
11.5. Skills for the digital economy
11.6. Skills for logistics
11.7. Policy priorities
11.8. Conclusion
Chapter 12: Realizing the promise of the AfCFTA - the role of industrial and competition policies
Witness Simbanegavi and Tendai Gwatidzo
12.1. Introduction
12.2. The investment and industrial development imperatives for Africa
12.3. Instruments of industrial policy in the AfCFTA
12.4. Regional industrial policy and the AfCFTA
12.5. Industrial Policy experiences and lessons from Asia and the EU
12.6. Potential challenges to implementing/coordinating industrial policy at continental level
12.7. Conclusion
Chapter 13: Intellectual Property and the African Continental Free Trade Area: A Public Health Perspective
Amal Nagah Elbeshbishi
13.1. Introduction
13.2. The international pharmaceutical market and Africa’s situation
13.3. The TRIPS Agreement and patents on drugs
13.4. The arguments for and against IP protection
13.5. What African countries should do?
13.6. Conclusions and recommendations
Biography
Albert G. Zeufack is the World Bank’s Country Director for DRC, Angola, Burundi, and Sao Tome et Principe. Prior to his appointment he was Chief Economist for Africa from May 2016 to June 2022. He was also Practice Manager in the Macroeconomics and Fiscal Management Global Practice and leader of the World Bank-wide Community of Practice for the Management of Natural Resources Rents. His main research interest is in the micro-foundations of macroeconomics.
Fulbert Tchana Tchana is a World Bank Lead Country Economist. Since joining the Bank in 2013, he has worked on analytical, advisory, capacity-building, and lending operations in the Middle East and Africa. He supported these countries in the areas of economic modeling, growth and productivity analytics, economic and trade diversification, oil revenue management, subsidy reform, and regional integration. Before joining the Bank, his previous positions included Economist for Cameroon’s Ministry of Finances and Assistant Professor of Economics at the University of Cape Town, South Africa.
Aly Sanoh is a Senior Economist in the Poverty and Equity Global Practice of the World Bank. His work focuses on understanding the drivers of poverty and inequality reduction in the Sahel countries. He has held positions in the Office of the Chief Economist of the Africa Region, where he conducted macroeconomic and microeconomic analyses for Africa’s Pulse.
