AfCFTA

This article contends that premised on being Africa’s major trading partners, economies such as the US, the EU, and China are likely to experience trade diversion when the AfCFTA comes into force. As a result of such potential trade diversion, the implementation of the AfCFTA could be hindered. It is only by addressing the interests of these economies that AfCFTA will foreclose the possibility of a “crisis of implementation”.

Africa boasts of at least eight RECs (or potential and existing FTAs) recognised by the AU, one emerging TFTA, and, a budding AfCFTA.  All these efforts are meant to lead to the realisation of the AEC

The present report entitled “Special Economic Zones: Emerging Frontiers for Industrial Growth” covers the period of January – March 2019. The Report is divided into sections that provide important updates on the current steps being taken by the Federal Ministry of Industry, Trade & Investment (FMITI) and the Federal Government of Nigeria (FGN) in thematic areas that include: trade and trade policy, SMEs, investment, industry, the African Continental Free Trade Area Agreement (AfCFTA) and general news update.

Because Ethiopia is the headquarters of the African Union its role on regional integration is usually taken as given. It is usually assumed that the state has and is making efforts to integrate with the continent. In this essay, I contend that Ethiopia’s historical engagement with regional integration has been at best passive and vague. On the contrary, its focus on regional integration at the moment seems different and active.

It is clear that over the past decade, there is perhaps no other African country that has made such large concessions to the United States as Morocco has. By first adjusting its intellectual property laws, and now allowing the importation of American poultry despite concerns for its domestic market, Morocco's has affirmed its loyalty to its trade partner. By contrast, countries such as South Africa, which refused the U.S.'s intellectual property law requirements and implemented anti-dumping tariffs against American poultry, are moving in the opposite direction of liberalized free trade with the United States particularly with regard to poultry.

The adoption of imprecise and relaxed SDT provisions that can easily provide leeway for countries to evade SDT obligations will only work contrary to the stated objective of the Agreement to promote and attain sustainable and inclusive socio-economic development among State Parties. Just as Amartya Sen correctly puts it, “the central issue of contention is not globalization itself, nor is it the use of the market as an institution, but the inequity in the overall balance of institutional arrangements—which produces very unequal sharing of the benefits of globalization”

The AfCFTA will continue to face a number of risks that threaten to impede continental integration in favour of fragmentation. Of interest to this post are bilateral trade agreements between African countries, individually or in smaller groups, on the one hand, and non-African countries or regions, on the other.

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.

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.

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.