African Continental Free-Trade Area

EENI- School of International Business

Subject: The African Continental Free-Trade Area (CFTA). Syllabus:

1. Introduction to the African Continental Free-Trade Area (CFTA)
2. Towards the African Continental Free-Trade Area (CFTA)
3. Why Africa needs the Continental Free-Trade Area?
4. Theories of Free-Trade Areas
5. The main objectives of the African Continental Free-Trade Area
   1. Increase the Intra-Africa Trade
6. Benefits of the Continental Free-Trade Area for Africa
7. Empirical Analysis of the CFTA (African Continental Free-Trade Area): economic gains and losses
8. Economic impact of the African Continental Free-Trade Area (2017)
9. Potential scenarios:
   1. South - Eastern FTA (COMESA, SADC, EAC, and IGAD) - Tripartite Agreement
   2. North - West - Central FTA (ECOWAS, CEN-SAD, ECCAS, and AMU)
10. Economic impacts of the Continental Customs Union (2019)
11. Perspectives of the African Continental Free-Trade Area
12. Road Map and Architecture of the CFTA
13. Bodies of the African Continental Free-Trade Area

The aims of the subject “The African Continental Free-Trade Area (CFTA)” are the following:

1. To understand the objectives of the African Continental Free-Trade Area
2. To evaluate the advantages and the economic impact on African Countries of the African Continental Free-Trade Area
3. To analyse the two possible scenarios for the realisation of the African Continental Free-Trade Area
4. To know the roadmap and architecture of the CFTA

Sample of the subject - African Continental Free-Trade Area

Description of the Subject (African Continental Free-Trade Area).

African Continental Free-Trade Area (CFTA)
- Fifty-four countries
- 1 billion people
- Combined GDP: 1.2 trillion dollars

In 1962 was created the Organisation of the African Union, one of his objectives was to search a socioeconomic model for the Post-independence period with the vision of “Unity and integration.”

In 1980 was adopted the Lagos Plan and 1991 the Abuja Treaty with the aim of creating the African Economic Community in six phases in thirty-four years, where Regional Economic Communities (REC) should play a fundamental role. In 2000 was set-up the African Union.

However, today, the vision of a “Pan-African Market Integration” has not achieved. By example, intra-African trade represents only 10%.

66% of African nations are limiting market access conditions, and protectionism is still predominant in Government policies, mainly in the Agriculture sector.

In 2012, the African Union announced the Action Plan for Boosting Intra-African Trade with the aim to boost intra-African trade by 35 billion dollars every year (mainly agriculture and industrial products) and reducing African imports from the world by 10 billion dollars.

The main objectives of the African Continental Free-Trade Area (CFTA) are:

1. The creation of the Continental Customs Union (2019). Free Movement of people, products, services and investment
2. To boost intra-African trade
3. To find a solution for the so-called “Spaghetti Bowl” and the overlapping of roles and countries in the Regional Economic Communities
4. To improve the African industry sector

The Tripartite FTA or the OHADA are excellent examples of the benefits of the future African Continental Free-Trade Area (CFTA).

Today fifteen Regional Economic Communities are working for Regional Integration in Africa:

- Community of Sahel-Saharan States
- Common Market for Eastern and Southern Africa
- East African Community
- Economic Community of Central African States
- Economic Community of West African States
- Intergovernmental Authority on Development
- Southern African Development Community
- Arab Maghreb Union
- Southern African Customs Union
- Mano River Union
- Indian Ocean Commission
- West African Economic and Monetary Union
- West African Monetary Zone
- International Conference on the Great Lakes Region
- Economic and Monetary Community of Central Africa

The Economic Commission for Africa identifies two scenarios:

1) The first group formed by the FTA- Tripartite Agreement (or South East Group) countries:
- COMESA
- EAC
- SADC

2) The second group (North-West-Central Africa) formed by
- ECOWAS
- CEN-SAD
- ECCAS
- AMU

Moreover, finally, the merger of these two groups into the African Continental Free-Trade Area (CFTA).