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New report questions the compatibility with the AfCFTA of FTAs concluded by individual or groups of African states

There are no translations available.

A report from IBON International titled Scramble for Africa: A Campaign Primer on the African Continental Free Trade Area Agreement (available both in English and French), gives a positive judgement of the African Continental Free Trade Area (AfCFTA), but also warns about the negative impact that the separate Free Trade Agreements (FTAs) that some African States or groups of States have concluded or are concluding with third countries will have on it. These Agreements, notes the report, risk to compromise the regional integration efforts that are pursued at regional and continental level and prevents the African Union from negotiating as a bloc, weakening this institution. The Economic Partnership Agreements (EPAs) concluded with the European Union (EU) are in the spotline.

The IBON report also gives a snapshot of African trade, showing how the continent still largely follows colonial trade patterns.

A common characteristic of African countries external trade is the deficit in the balance of trade, which is a consequence of the fact that the value of its imports exceeds that of exports. As a result, African countries are forced to borrow hard currency (e.g., dollars, euros, etc.) in order to pay foreign suppliers abroad. When this does not happen, the lack of foreign currency reserves by African banks risks to paralize the sourcing processes of African companies, as documented in this recent article.

Currently, Africa accounts for only 2% of global trade. African imports from outside the continent are mainly food, pharmaceuticals, electronics, information technology products, machineries, and vehicles. Manufacturing products, industrial machineries, and transport equipment make up more than 50% of African imports. Regarding the main suppliers of manufactured goods, these are the EU (35%), China (16%), and other Asian countries (14%). Seventy percent of goods imported by Africa from the EU are manufactured goods.

The situation on the export side is totally different. Over 75% of Africa's exports to the rest of the world are raw materials or natural resources. In particular, 61% of exports to the EU are primary goods, reflecting an old colonial pattern of trade. The same pattern is evident in Africa’s trade with China as most of African exports to China are agricultural commodities, while China’s exports to Africa are made up for more than 50% of mechanical, electrical and technology products. Trade between China and Africa has increased twenty-fold from 2001 to 2020 and it nearly doubled from 2020 to 2021.

The report notes that differently from exports to the rest of the world (which as indicated above, are mainly made up of primary commodities and natural resources), intra-African exports are composed of more processed products. More precisely, manufactured goods represent one third of intra-Africa trade flows, even though a significant portion of such flows are products imported from third countries and simply re-exported from one African nation to another. Trade in African-manufactured goods is minimal and reflects the limited state of manufacturing in the continent, which on average represents only about 10% of the African Gross Domestic Product (GDP).

The main economies in Africa are Egypt, Nigeria, and South Africa, which together contribute more than half of the continent's GDP. Among them, South Africa generates 25% of the African GDP. In contrast, Africa's six sovereign island nations (Cape Verde, Sao Tomé and Príncipe, Madagascar, Comoros, Seychelles, and Mauritius) contribute only 1% of continental GDP. As major fuel exporters, Egypt and Nigeria export more outside the continent than to their neighbours. Only smaller African economies like Uganda and Zimbabwe trade more with their neighbouring countries.

 

 

 

 

 

 

 

 

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