AFRICAN CONTINENTAL FREE TRADE AREA: Trade Opportunities or a Threat to ECOWAS?
- Uka Ezenwe
- ( paper pages. 381 - 402 )
Abstract
African countries have embraced regional economic integration as
a strategy of economic transformation and sustainable development
since the 1950s. To date, however, African countries have had a
dismal record in economic integration. With the notable exception
of SACU, African integration schemes have had very limited, if any,
impact on the economies of the participating countries and virtually
no effect on the world trading system.
The establishment of the AfCFTA is a fresh attempt to succeed,
where past endeavours did not achieve much. The Agreement
establishing the AfCFTA is based on its potential to “boost intra-African trade, stimulate investment and innovation, foster structural
transformation, improve food security, enhance economic growth
and export diversification, and rationalise the overlapping trade
regimes of the main regional economic communities”. The
attainment of this lofty ambition is a function of the stakeholders’
ability to overcome all the challenges responsible for failure in the
past endeavours. Unquestionably, a continental free trade area of
55 countries with an estimated consuming population of 1.3 million
people will, all things being equal, create a large market, lower
tariffs and reduce non-tariff barriers, increase intra-area trade
while reducing transactions cost, enhance export diversification
and attract foreign direct investment, among other things.
As the eight selected RECs, including ECOWAS, will form the
building blocks of the AfCFTA, the synergy will positively impact on
ECOWAS in several ways. These include: offering it a large market
for its manufactures and services, provision of incentives for FDI, a
vibrant and competitive industrial sector, a good platform for infrastructure development and technological transfer, and greater
access to inputs and intermediary outputs which reduces the cost of
innovation. There is no doubt that potentials exist in economic
integration schemes for the advancement of the economies of
member states. Albeit, the traditional theory of economic
integration does not guarantee high economic growth nor does it
offer an equitable distribution of the gains from trade. A lot depends
on how the emerging challenges in the integration process are
managed.
Citation
Uka Ezenwe.
2021.
"AFRICAN CONTINENTAL FREE TRADE AREA: Trade Opportunities or a Threat to ECOWAS?"
The Nigerian Journal of Economic and Social Studies,
63 (3): 381 - 402.
JEL Classification
F02, F15, F13, F14
