Africa is the world’s second-largest and most-populous continent, accounting for about 15% of the world’s population. Africa has experienced remarkable economic growth since 2000, due to its abundant natural resources and robust demand for consumer goods and services from a growing middle class. It is time to discover your market in Africa.
Many products from most African countries are eligible for duty-free entry into the U.S. market under the African Growth & Opportunity Act (AGOA) program. are This post examines key regional trade agreements (RTAs) that have removed or minimized barriers to trade within Africa and with various external partners. Five African regions are also in various stages of negotiating Economic Partnership Agreements with the European Union.
It is helpful to think of the African continent in the following regions or groupings of trade partners:
(Algeria, Libya, Mauritania, Morocco and Tunisia)
The Arab Maghreb Union is a trade agreement among the Arab countries in North Africa. Members have agreed to coordinate and harmonize their policies and strategies for sustainable development however this goal is undermined by political tensions over the status of the Western Sahara.
Greater Arab Free Trade Area (GAFTA)
(Algeria, Bahrain, Egypt, Iraq, Kuwait, Lebanon, Libya, Morocco, Oman, Palestine, Qatar, Saudi Arabia, Sudan, Syria, Tunisia, United Arab Emirates & Yemen)
Several northern African countries (in bold above) are members of this pan-Arab free trade zone (also called the Pan-Arab Free Trade Area). The members have eliminated most tariffs on goods traded within GAFTA.
(Burundi, Kenya, Rwanda, Tanzania & Uganda)
Members have established long-term goals of economic, monetary, and political union. Currently, the countries’ currencies are freely convertible, standards for goods are harmonized and health certificates issued by national agencies are recognized in each country. The countries share a common language, Swahili.
Economic and Monetary Community of Central Africa (CEMAC)
(Cameroon, the Central Africa Republic, Chad, the Republic of Congo, Equatorial Guinea, & Gabon)
CEMAC members aim to progressively create a single market. Officially, CEMAC became a free-trade area by the end of 2000. However, many tariff and non-tariff barriers remain in place. The countries share a common currency, the CFA franc and capital moves freely across their borders.
West African Economic and Monetary Union (UEMOA)
(Benin, Burkina Faso, Cote d’Ivoire, Guinea-Bissau, Mali, Niger, Senegal & Togo)
UEMOA members share the goal of creating a common market between member states by having a common external tariff (CET), a common trade policy, and free movement of persons, goods, capitals, and the right to freely establish businesses in member states. In 2000, UEMOA countries eliminated tariffs on imports from members and introduced a CET, thereby establishing a customs union. The countries share a common currency, the CFA franc.
Economic Community of West African States (ECOWAS)
(Benin, Burkina Faso, Cape Verde, Cote d’Ivoire, the Gambia, Ghana, Guinea, Guinea-Bissau, Liberia, Mali, Mauritania, Niger, Nigeria, Senegal, Sierra Leone & Togo)
ECOWAS is notable for bridging the traditional divide across its sixteen anglophone and francophone members. ECOWAS trade policy is designed to increase intra-regional commerce, raise trade volume and spur economic growth and development. Members continue to work on creating a customs union.
South Africa Customs Union (SACU)
(Botswana, Lesotho, Namibia, South Africa & Swaziland)
SACU is a functioning customs union within which the goods of member states circulate duty-free. A common external tariff (CET) is collected into a common fund managed by South Africa, the dominant partner in this regional arrangement. SACU countries are also members of the Southern Africa Development Community (SADC).
Common Market for Eastern and Southern Africa (COMESA)
(Angola, Burundi, Comoros, Democratic Republic of Congo, Djibouti, Arab Republic of Egypt, Eritrea, Ethiopia, Kenya, Madagascar, Malawi, Mauritius, Namibia, Rwanda, Seychelles, Sudan, Swaziland, Uganda, Tanzania, Zambia & Zimbabwe)
COMESA includes members of SACU and EAC (see above). Its Mission includes achieving a fully-ntegrated, internationally competitive and unified single economic space within which goods, services, capital and labor move freely across national frontiers.
To learn more about how to take advantage of these agreements and discover your market in Africa contact us.
Update: On January 1, 2021, the world welcomed the African Continental Free Trade Area (AfCFTA). Negotiated by 55 African countries in 2018, and still a work in progress, the Agreement Establishing the African Continental Free Trade Area has the vision of creating a single African market. We introduce the AfCFTA in this post.
This post was co-authored with Nara Alvares.