مجلة بحوث الإدارة والاقتصاد
Volume 5, Numéro 1, Pages 15-44
2023-03-09

Africa's Continental Free Trade And Sustainable Development: An Economic Assessment

Authors : Quartey Jonathan .

Abstract

The quest for Africa’s development breakthrough appears to be closely related to the African Continental Free Trade Area (AfCFTA). The Economic Commission of Africa believes the move could solve chronic poverty and joblessness prevailing on the continent. However, the benefit of hindsight reveals limits set by laws of thermodynamics on the extent to which economic activities can be most beneficial to humanity. The motivation to expand trade thrives on energy for extraction, production and consumption, each of which yields undesirable waste products. The need for sustainable development has been a response to the limits imposed by excessive waste, stretching environmental carrying capacity to breaking point. Thus in order not to repeat the development errors of the past, Africa’s Continental Free Trade Area needs to ascertain the extent and cost of resultant environmental damage. Clearly, AfCFTA is yet to give consideration to such effects. The COVID-19 pandemic however, should be a reminder of how devastating a collision between economic activity and the natural environment can be. Existing studies on AfCFTA have so far been restricted to quantifying the effects of tariff reductions, non-tariff barriers and trade facilitation. This study however, assesses the outcomes of the efforts being made to achieve the goals of AfCFTA, from an environmental economics analytical framework, in line with tenets of sustainable development. It employs data mainly from the World Bank and AfCFTA Secretariat to analyze welfare effects of AfCFTA through resultant deforestation, solid waste management and climate change adaptation. The study found the resulting environmental damage to be US$ 744.71 billion, which far exceeds the projected AfCFTA benefits of US$450 billion to be realized by 2035. Thus in its current form, AfCFTA will reduce the economic welfare of Africa by at least US$294.71 billion by 2035. While in the formative stages, AfCFTA will be better served if stakeholders can pay attention to the call for a fully operational plan to offset the impending environmental damage, which cannot be taken for granted, if Africa wants sustainable development.

Keywords

Africa ; African Continental Free Trade ; Deforestation ; Economic Welfare ; Environmental damage ; Sustainable Development ; Waste Management