Deepening Regional Integration in Africa: A Computable General Equilibrium Assessment of the Establishment of a Continental Free Trade Area followed by a Continental Customs Union

Abstract

expressed in this paper are the authors ’ own and may not necessarily reflect the position of the United Nations Economic Commission for Africa. Any mistakes or omissions are the sole responsibility of the In January 2012, the 18 th African Union (AU) Summit of African Heads of States and Governments was held in Addis Ababa. At this occasion, a major decision was taken with the adoption of the AU Action Plan for “Boosting Intra-African Trade and the Establishment of a Continental Free Trade Area (CFTA)”. This attests of a strong desire to deepen regional integration in Africa. Moreover, the AU Member States expressed the wish to see the share of intra-African trade doubling within the next 10 years. While a tentative date of 2017 has been agreed for the formation of a CFTA, the Abuja Treaty, signed in 1993, specifically states the requirement for establishing a continent-wide Customs Union by 2019. This paper first reviews the main trade-related constraints faced by Africa today. Then, it explores in what extent the formation of a CFTA followed by a Continental Customs Union (CCU) would help Africa to overcome these limitations and to fulfill AU Member States ’ objective in terms