The Impact of Political Instability on Trade Agreements in Africa

Abstract

Africa is one of the most economically integrated continents in terms of the number of regional trade agreements within the region, but trade between African countries remains only around 10% of Africa's total trade, much lower than levels observed in other continents. Since the 1990s, along with the IMF and World Bank's economic development programs, as well as developed countries' economic aid plans, many African countries have opened their markets and implemented about 30 regional trade agreements. Thus, each African country is a member of at least one regional trade agreement. In addition, the largest regional trade agreement, which will represent a larger population than NAFTA or the EU and one similar to that covered by the Trans-Pacific Partnership (TPP), was initiated in Africa (Tripartite Free Trade Area, TFTP) in 2015. The trade and economic growth trend of African countries, however, is often used as a clear example that shows how economic integration does not guarantee an increase in trade, because Africa still accounts for barely 3% of world GDP and trade, whereas about 15% of world population lives in the continent.