At the 2024 GCCA Africa Cold Chain Conference held in Cape Town, Professor Lawrence Edwards, director of policy research in services and manufacturing at the University of Cape Town, delivered a presentation on the challenges and opportunities associated with reducing trade barriers within the framework of the African Continental Free Trade Area( AfCFTA).
ASSOCIATIONS
Reducing trade barriers around AfCFTA
Compiled by Eamonn Ryan from the presentation
At the 2024 GCCA Africa Cold Chain Conference held in Cape Town, Professor Lawrence Edwards, director of policy research in services and manufacturing at the University of Cape Town, delivered a presentation on the challenges and opportunities associated with reducing trade barriers within the framework of the African Continental Free Trade Area( AfCFTA).
IImage by Nepvia on Freepik
While generally adopting a perspective of‘ constructive criticism’ typical of economists, Edwards aimed to offer a balanced view on AfCFTA’ s potential. He highlighted three key messages:
• Progress in liberalisation: Africa has made significant strides in opening its economies, with South Africa being a member of the Southern African Customs Union( SACU) and the Southern African Development Community( SADC). Despite these advancements, tariffs remain a substantial barrier to international trade across the continent.
• Tariff reductions and their limitations: While reducing tariffs is essential for enhancing intra-African trade, many African nations tend to protect food products within their tariff offers. This is particularly relevant for the agroprocessing sector, which is seen as a critical driver of industrialisation. As a result, the exclusion of food products from tariff reductions poses challenges to broader trade liberalisation.
• Beyond tariffs: non-tariff measures matter: Although tariffs are significant, they are not the sole impediment to trade. Edwards stressed the importance of addressing non-tariff barriers, such as trade facilitation, border procedures and sanitary regulations. He pointed out that these areas, often overlooked, could have a substantial impact on reducing trade costs and enhancing the flow of goods across borders.
The AfCFTA represents an ambitious initiative with high expectations. However, Edwards noted that the effects are not yet fully realised. The tariff agreements and offers remain incomplete, largely due to unresolved Rules of Origin requirements. Until these critical components are finalised— especially in sectors like clothing and automotive— the full potential of the AfCFTA cannot be unlocked.
He connected the contemporary landscape of African trade with its historical roots. He referenced the 1991 Abuja Treaty, which aimed to foster regional integration across Africa by establishing eight regional economic communities( RECs). The overarching goal was to create a continentwide common market and ultimately a monetary union. This ambitious plan envisioned a phased approach: starting with the formation of free trade areas, evolving into customs unions, and finally moving toward a common market with shared monetary policies and currencies.
However, the historical outcomes of these integration efforts have varied. Edwards pointed out that three of the RECs have yet to form free trade areas, while only two— ECOWAS( Economic Community of West African States) and the East African Community( EAC)— have successfully established customs unions. The EAC stands out as the only REC to achieve a single market. No REC has fully realised an economic and monetary union, although some progress has been made within ECOWAS through the establishment of subsets like the West African Monetary Zone.
Current levels of intra-African trade remain low, accounting for only about 11-12 % of total imports among African economies.
A significant challenge identified by Edwards is the overlapping memberships of countries within these various regional schemes, which has led to a convoluted‘ spaghetti bowl’ of integration efforts. This complexity complicates the formation of effective customs unions and trade agreements.
THE AfCFTA: A PATH FORWARD
Despite the historical challenges, AfCFTA represents a renewed opportunity for regional integration. It aims to break down barriers and streamline processes that have hindered previous efforts. Edwards emphasised that AfCFTA could serve as a catalyst to address these overlapping issues and reinvigorate the regional integration agenda.
However, he cautioned that the success of AfCFTA hinges on addressing intricate details within its frameworks, particularly concerning trade in goods. The various annexes associated with AfCFTA are crucial for driving integration and include:
• Tariff offers: The commitments made by countries to reduce tariffs on goods
• Rules of origin: Regulations that dictate how products qualify for tariff reductions under the agreement
• Customs cooperation: Frameworks for improving customs operations and collaboration among member states
• Trade facilitation: Efforts to streamline and simplify trade procedures
• Non-tariff barriers: Challenges that extend beyond tariffs, such as regulatory hurdles and standards compliance.
These components are vital for ensuring that AfCFTA can deliver meaningful economic benefits across the continent.
Despite the potential of AfCFTA, current levels of intra-African trade remain low, accounting for only about 11-12 % of total imports among African economies. However, this aggregate figure masks significant variations among individual countries. For instance, some countries, particularly within the Southern African region, source a substantial share of their imports— up to 60- 70 %— from other African nations. In contrast, nations like Gambia source less than 1 % of their goods from within Africa, highlighting the disparities in regional integration.
Edwards noted that many countries with higher rates of intra-African imports tend to trade with established preference partners, reflecting the successes of previous integration schemes. For South Africa, the role as a dominant supplier within SACU and the SADC Free Trade Area has been instrumental in facilitating trade.
He pointed out that, despite being a member of ECOWAS, Nigeria ' s imports from other member countries remain strikingly low, illustrating that tariffs are not the sole barriers to international trade.
THE ROLE OF TARIFFS AND TRADE AGREEMENTS
Edwards stressed the importance of understanding the factors that influence African countries ' participation in regional markets. While trade agreements are crucial, they are not the definitive solution. He emphasised the need to unpack the variations in trade participation across the continent.
Shifting the focus to South Africa, Edwards highlighted the significance of the African market for its exports. Notably, 72 % of South Africa’ s non-metal mineral exports and 58 % of its food exports are directed towards the African market. This points to the region ' s critical role in diversifying South Afwrica ' s export base beyond minerals and metals.
Analysing South Africa’ s export dynamics, Edwards noted that nearly half of its exports go to SACU members, with two-thirds of the remaining exports directed to SADC members. Only a small percentage— 5 % of the 28 % of non-mineral goods exported to Africa— reaches countries outside these preferential trade agreements. This pattern indicates that South Africa’ s export structure is heavily influenced by existing free trade arrangements, leaving a gap for AfCFTA to facilitate access to new markets.
Further analysis revealed that when tariff barriers decrease, there is a notable increase in exports, driven by both new firms entering the market and existing firms expanding their product lines. Edwards pointed out that exporters tend to target products that face high protection in destination markets, capitalising on preference margins.
He also addressed the challenges posed by tariffs from non-partner African countries,
Despite the historical challenges, AfCFTA represents a renewed opportunity for regional
integration.
8 www. coldlinkafrica. co. za COLD LINK AFRICA • May 2025