Africa’s Trade Policy Context in the 21st Century

Abstract International trade plays a pivotal role in the achievement of international development goals. Every country in the world endeavours to increase its exports and decrease imports so as to achieve economic development. This has resulted in Africa scaling up efforts to install stronger trade positions as part of the continent’s development strategy. Despite this effort, international trade in Africa is derailed by its colonial past, where it relies heavily on the exportation of unprocessed products, mostly agricultural and mineral products. Furthermore, the colonial legacy developed a somewhat dependent model among almost all countries (except the North African countries) that continues to exist even in the post-independence era. The chapter looks at the trade policies that the African countries have put up and other efforts that are being pursued in an effort to break out of the non-progressing cycle. It sets to do this analysis by reviewing trade performance by regional trade agreements within the continent, their successes and challenges. The continent experiences a low trade growth rate, balance of payments deficits, low and stagnant intra-regional trade, heavy reliance on the extractive sector exports, vulnerability to commodity price shocks, institutional limitations and poor value addition. The African Continental Free Trade Area (AfCFTA) offers renewed commitment towards the greater African cause. The study recommends that in order to unlock Africa’s trade potential, it has to enhance regional integration, diversify trade, reduce overlapping blocs’ membership, integrate markets and consolidate African value chains, among others.