In March 2018, Africa leaders met in Kigali and agreed to start the process of establishing an African continental free trade (AfCFTA), the world’s largest free trade area in terms of numbers of participating countries since the formation of the World Trade Organization. As of August 2020, there are 54 signatories and 30 nations have ratified the agreement (Africa Union, 2020).
The AfCFTA recognises the best practices in the 8 Regional Economic Communities (RECs) and considers their successful regional integrations that lead to market access and trade creation among the member states to play an important role in the implementation of the AfCFTA agreement.
“ …Parties that are members of other regional economic communities, regional trading arrangements and custom unions, which have attained among themselves higher levels of regional integration than under this Agreement, shall maintain such higher levels among themselves.”
AfCFTA Agreement, article 19 (2)
The data used to estimate 2018 regional trade trends in Africa were sourced from the Observatory of Economic Complexity (OEC) platform. A platform that shows trading flows around the world.
- Exports from African countries totaled $503.4 Bn, and imports worthed $550.1 Bn, resulting in a negative trade balance of $46.7 Bn.
- In 2018, CEN-SAD was the largest exporter on the continent (exports worth $245.29 Bn).
- ECCAS and SADC were the communities with successful economies, their trade surplus were $41.8 Bn, and $33.8 Bn respectively
- COMESA, CEN-SAD, IGAD and EAC had trade deficits of $85.2 Bn, $72.4 Bn, $31.8 Bn, and $20.9 Bn respectively, while accounts balance for ECOWAS and AMU were approximately balanced.
- Across all trading blocs, large and more developed countries tend to benefit more than less developed countries members in the same trading community.
RECS have achieved deeper integration, removed tariff barriers between members, and have already demonstrated their key role in the AfCFTA process by helping member states during the negotiations. The RECs will be highly important and a catalyst for the effective implementation of the AfCFTA agreement to ensure socio-economic development as well as raising the standard of living of the people of Africa.
