Macroeconomic and sectoral impacts of the AfCFTA: The case of Nigeria and South Africa in light of core export competences
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Macroeconomic and sectoral impacts of the AfCFTA: The case of Nigeria and South Africa in light of core export competences
Publisher: African Review of Economics and Finance
Pub: 2025-01-23 09:15:32
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The African Continental Free Trade Area (AfCFTA), considered the largest free trade area globally by participating countries, entered into force in May 2019. This paper investigates the macroeconomic and sectoral impacts of the AfCFTA on Nigeria and South, specifically targeting their core export competences and the sustainability of import demand within the AfCFTA. Utilising selected filters of the Decision Support Model (DSM) and the Global Trade Analysis Project (GTAP)-Computable General Equilibrium (CGE) model, the paper projects that the AfCFTA could improve the macroeconomic and sectoral positions of both Nigeria and South Africa. Expected macroeconomic improvements include gains in real GDP, household income, and export volumes. Sectoral, Nigeria’s textiles, clothing, and chemical products, along with South Africa’s petroleum, coal products, and machinery, are expected to experience significant improvements in export value and value addition. However, potential trade balance deterioration due to increased imports poses challenges. Hence, the paper underscores the need for effective policy interventions to manage such challenges and ensure inclusive growth. By considering the countries’ core export competences and the sustainability of import demand in the AfCFTA, this paper contributes to existing literature by offering valuable insights for policymakers and stakeholders on harnessing the AfCFTA’s potential to drive economic growth and development in the African continent
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Keywords
AfCFTA; CGE; macroeconomic impact; Nigeria; RTAs; sectoral analysis; South Africa
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Keywords
AfCFTA; CGE; macroeconomic impact; Nigeria; RTAs; sectoral analysis; South Africa