Export potential under the African Continental Free Trade Area: Limited prospects for the least developed countries in Africa?

Free trade under the African Continental Free Trade Area commenced in January 2021. Countries agreed to remove tariffs on 90 per cent of goods, progressively liberalize trade in services and eliminate non-tariff barriers, to improve regional cohesion, create a single large African market and promote gross domestic product (GDP) growth through trade.

With the objective of guiding feasible policies and sectoral strategies at the national and regional levels, this policy brief highlights how countries in Africa, in particular the least developed countries, benefit differently from tariff liberalization and the removal of non-tariff barriers.
 

Key points:

• Export potential under the African Continental Free Trade Area is heavily concentrated in three major exporters: Egypt, Morocco and South Africa. The 33 least developed countries in Africa account for only 16 per cent of the export potential.
   
• The least developed countries have comparably greater export potential in agricultural products. Food processing industries also provide an opportunity for value addition and commodity-based export growth among these countries.
   
• Periodic reviews of tariff concessions should allow for policy space for addressing weak productive capacities among the least developed countries and diversifying their imports.