Political risk as a deterrent to industrialization of Africa

Many agree that the construction of the African Free Trade Area (AfCFTA) can be an important opportunity for advancing the industrialization of the African continent[1], as the newly established Free Trade Area (FTA) will offer opportunities to both African and foreign investors to establish productive units in one or more African countries from where they can serve the marketsContinue reading “Political risk as a deterrent to industrialization of Africa”

‘Bad trade’ and risks of stifling local production in Africa

John Cary, a prominent British merchant and writer on matters regarding trade, wrote between the end of ‘600 and the beginning of ‘700 two manuscripts where he argued that a trade model based on the export of raw materials/commodities and import of manufactured/industrial goods has a destructive effect on the economy of the nation exporting raw materials, as it stiflesContinue reading “‘Bad trade’ and risks of stifling local production in Africa”

Informal cross-border trade in Africa and approaches in promoting formalization

The term “informal sector” was used for the first time by the International Labour Organisation in a report drafted in 1972, titled  “Employment, incomes and equality – a strategy for increasing productive employment in Kenya”, following a mission conducted to Kenya to study the causes of unemployment in the country.  After observing that the informal sector plays an essential role in the Kenyan economyContinue reading “Informal cross-border trade in Africa and approaches in promoting formalization”

The 3-color card trick in Africa and a possible continental vehicle insurance scheme

Many African Regional Economic Communities (RECs) have adopted regional motor vehicle insurance schemes to cover third-party liabilities and medical expenses for the drivers in case they suffer any bodily injury as a result of a road accident. The advantage of such schemes is that they facilitate cross border movement of vehicles between States, as drivers can travel within these Regions withoutContinue reading “The 3-color card trick in Africa and a possible continental vehicle insurance scheme”

AfCFTA: focus on tariff or non-tariff barriers?

Apart from elimination of tariffs between the African Union (AU) member States (which means elimination of import duties and other levies on imported goods), another objective of the AfCFTA is the elimination of non-tariff barriers (NTBs). NTBs are generally defined as all those restrictive regulations and procedures, other than tariffs, that make more difficult and/or costly to import or export products. Among these measures there are importContinue reading “AfCFTA: focus on tariff or non-tariff barriers?”

Is the AfCFTA a path to industrialization or industrialization should come first?

A common topic among academics is that Preferential Trade Agreements (PTAs) spur industrialization because of the increasing trade flows that are generated in the preferential trade areas as a consequence of tariff liberalization, that foster competition and efficiency of economic operators, promoting industrial development[1]. But if we look at what happened in other Regional contexts, this is not exactly the path that others followed.  TheContinue reading “Is the AfCFTA a path to industrialization or industrialization should come first?”

AfCFTA : “next” or “last” generation Preferential Trade Agreement?

The economic debate on relationship between multilateralism and regionalism/bilateralism, points out how the most recent, so called “next generation”, Preferential Trade Agreements (PTAs) go much further than simply removing customs tariffs between member States, having much deeper objectives and covering many regulatory issues such as services, intellectual property rights protection, investment, and competition policy, among others (see Horn, H., Mavroidis, P. C. and Sapir, A. (2010) “Beyond the WTO? An AnatomyContinue reading “AfCFTA : “next” or “last” generation Preferential Trade Agreement?”

Perfect and imperfect Customs Unions and Free Trade Areas

A Customs Union (CU) is a Preferential Trade Agreement (PTA) where two or more States eliminate tariff barriers between them, together with the acceptance of a Common External Tariff (CET) against non-members. In this sense a CU represents a form of economic integration between countries that is more advanced with respect to a Free Trade Area (FTA), which is another form of PTA, but exclusively characterized by the abolitionContinue reading “Perfect and imperfect Customs Unions and Free Trade Areas”

Colonial legacy of transport systems in Africa and low intra-regional trade

Most of the transport infrastructure in the sub-Saharan African region dates back to the colonial era. Colonial rails and roads were built by the European colonizing nations with the main purpose of connecting mining areas and agricultural production centers in the interior to the coast, so to allow the exports of raw materials and the import of European manufactured goods[1]. On theContinue reading “Colonial legacy of transport systems in Africa and low intra-regional trade”

The African Union and the AfCFTA Agreement

The African Union was created in 2002 to replace the Organisation of African Unity (OAU), an organisation founded by 32 African states in Addis Ababa, Ethiopia, on May 1963 with the aim of promoting African integration and to represent the African continent as a united bloc on the international stage. The ideal at the heart ofContinue reading “The African Union and the AfCFTA Agreement”

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