Africa: Trade is trendy

5 min

The Africa Union is set to launch a Continental Free Trade Area (CFTA) on 21 March. It will follow other announce¬ments such as Morocco’s ongoing adhesion the Economic Community of West African States (ECOWAS). Trade integration in Africa has been quite low so far – only 25% of African exports go to other African economies – indicating that more intra-continental trade is likely to boost growth. Regional integration has been the DNA of export-driven strategies elsewhere. Regional trade accounted for 70% of exports in Europe and 60% in Asia in 2017. Trade barriers are still high among African economies which see each other often as trade com¬pet¬itors. For example, the West African neighbors Côte d’Ivoire and Ghana maximized their cocoa beans out¬put in 2017 despite existing agreements supposed to cap the output when prices are low. In contrast, the East African Commu¬nity showed a better performance of regional trade integration, with interesting results. It was the only re¬gion to smooth completely the growth impact of low commodity prices, growing by +6.5% on average in 2015-17.