The need for industrial policy coordination in the African Continental Free Trade Area

Abstract

ON 21 MARCH 2018, 44 OF THE 55 MEMBERS of the African Union (AU) signed the African Continental Free Trade Area (AfCFTA) agreement.1 The agreement required members to remove tariffs from at least 90 percent of trade within the continent. The initial agreement was not signed by Benin, Botswana, Burundi, Eritrea, Guinea-Bissau, Lesotho, Namibia, Sierra Leone, South Africa and Nigeria. Although South African officials cited merely technical legal reasons for their failure to sign,2 the Nigerian president expressed fear that free trade might hurt domestic industries. In essence, the AfCFTA raises a number of issues usually associated with free trade: social cost, private adjustment cost and public adjustment cost3.