African Continental Free Trade Area Agreement

Socio-Economic Development in Africa: Tax Reform as a Tool for Fostering the Objectives of the AFCFTA

African countries should consider alternatives to the arm’s length principle. A viable alternative to the arm’s length principle: the unitary taxation (formulary apportionment) approach should be considered. This approach looks in detail at the economic activities resulting into the profits of MNCs for tax purposes. Under this approach, tax authorities in Africa will justifiably impose corporate income taxes on “actual” profits of MNCs accruing form economic activities carried out in their jurisdictions, thereby eliminating the opportunities for base erosion and profit shifting in Africa.

Accommodating informality in the African Continental Free Trade Area: Some basics and challenges

A response to informality includes the suggestion that policy makers should formalize informal entities and activities. This suggestion holds that, responding to informality in such a way will ultimately help create better jobs, improve productivity and reduce poverty. But then, the question again arises at this point: is formalization the optimal solution? Shouldn’t the focus in the short-term rather be to improve conditions for informal sector actors and the spaces in which they operate than formalize? These are some of the broad challenges facing Africa, the AU and the governments of respective member states and other stakeholders as Africa proceeds with the AfCFTA.

How can the African Continental Free Trade Area Improve Maritime Trade among African States?

The AfCFTA can be used as a booster for the advancement of maritime trading activities and the shipping industry in Africa. Since the main aim of the AfCFTA is to create a single market where goods, services, people and capital will move freely, all 55 countries have to improve their road as well as maritime networks to allow easy access and transportation of goods and people across the region. The AfCFTA along with the African Union’s 2050 Integrated Maritime Strategy can bring a panoply of opportunities and benefits for maritime sector.

Expanding intra-African Trade through Market Governance Tools

The creation of a single continental unit is meant to allow the formation of larger economies of scale and enhance the region’s specialization in agricultural and industrial production. However, the reduction or even elimination of tariffs will not be enough to reach the AU’s objective of doubling the existing level of intra-African trade, as significant and continent-specific challenges lie ahead.

Addressing Possible Institutional Bottlenecks in the Agreement Establishing the African Continental Free Trade Area

The AfCFTA is thus a positive development for Africa as it seeks to advance its own interests through intra-African trade. For a region of the world that contributes to only about 3% of global trade, increasing intra-African trade is a laudable project. For example, while intra-Asia and intra-Europe trade account for 59 per cent and 69 per cent of exports respectively, intra-African trade accounts for only 18 per cent of total exports. However, despite the modest successes at improving intra-African trade through the eight African Union-recognized regional trade agreements on the continent, there are genuine apprehensions regarding the viability of the proposed AfCFTA.

The Role of the AfCFTA in delivering the promises of the Fintech industry in Africa

The smooth and effective running of the AfCFTA and proper negotiation in the second phase of negotiations could help in the attainment of the continent’s most daring and ambitious goal yet. This is the creation of a single African market characterized by digital, financial and social inclusion; with our very own cities (Lagos, Nairobi, and Cape Town) competing to be the Fintech hub of the continent and the globe!

IEL and the AfCFTA: Beyond Trade Liberalisation, Economic Transformation and Development

In the specific context of the AfCFTA, (international economic) law is supposed to focus on producing rules designed to promote trade liberalisation by eliminating any constraints that are likely to prevent the flow of capital across the continent and to restrict the growth of business activities well as their expansion across national borders.

Free Movement of African Citizens: An Imperative for Continental Free Trade in Africa

The signing of the Agreement establishing the African Continental Free Trade Area has been greeted with a lot of fanfare and has also been viewed as the possible Eldoradofor intra-African trade. While the text of the Agreement if implemented, would significantly improve Africa’s trading position vis-a-vis the global north and the far east, there are several obstacles that need to be crossed. One   obstacle is the ability of Africans to move within the continent freely either for leisure or to engage in commerce. It is this obstacle that the Protocol on Free Movement is created to address.

Why AfCFTA may not be a credible forerunner of single African market

The first seeming obstacle to the emergence of a single African market is the contradictions between the stated aims of AfCFTA and some of the principles set out in the AfCFTA Agreement. As noted earlier, AfCFTA’s objectives include creating “a single market” and laying “the foundations for the establishment of a Continental Customs Union”. Yet, one of the principles under Article 5 is “variable geometry”, that is, differentiated integration. Of course, variable geometry was designed to recognise the heterogeneity and diversity in Africa’s economies. However, a single market is not consistent with an a la carte approach, where members integrate at different speeds.