A Political Economy Assessment of the AfCFTA

Abstract

The African Union agreed in March 2018 to form the African Continental Free Trade Area (AfCFTA), which became effective in April 2019 when 22 member countries ratified it. However, it will take some time until the agreement really works. To better understand potential failures and successes of the trade liberalization agenda set by the AfCFTA, this chapter assesses the motives and incentives of different actors including domestic businesses, multinational corporations, African and foreign governments, and the development community. Evidence shows that it is too early to have a clear picture of individual groups’ and actors’ interests as well as of winners and losers. It is, however, obvious that governments are restricted by political circumstances and, therefore, often deviate from first-best or textbook solutions.