The Impact of AfCFTA on Welfare and Trade: Nigeria and South Africa in Light of Core Export Competences

Gabriel Mhonyera, Daniel Francois Meyer

Research output: Contribution to journalArticlepeer-review

3 Citations (Scopus)

Abstract

The African Continental Free Trade Area (AfCFTA) entered into force in May 2019 after surpassing the required 22 ratifications. This article combines the decision support model (DSM) and the Global Trade Analysis Project (GTAP) computable general equilibrium (CGE) model to make quantitative assessments of the expected welfare and trade effects of the AfCFTA on Nigerian and South African sectors possessing sustained export potential within the AfCFTA member states. By specifying two scenarios of AfCFTA membership, the simulation results reveal positive welfare gains for Nigeria (USD 146.12 million) and South Africa (USD 1.46 billion), originating from the GTAP sectors identified with sustainable export opportunities in the AfCFTA member states. The trade deal is also expected to be net-trade-creating, with a net trade of USD 2.15 billion at the global level. The assessments in this article are valuable in informing trade policy in light of core export competencies and the size, growth and consistency of the import demand in AfCFTA countries. It is also the first time elements of a product-level export market analytical tool are harmonised with a CGE model in the welfare and trade assessments of regional and/or bilateral trade arrangements. Policymakers and export promotion associations in both Nigeria and South Africa are recommended to utilise the results found in this article as a point of departure in leveraging the welfare-improving sustained export opportunities identified within the AfCFTA.

Original languageEnglish
Article number5090
JournalSustainability
Volume15
Issue number6
DOIs
Publication statusPublished - Mar 2023
Externally publishedYes

Keywords

  • AfCFTA
  • African union
  • DSM
  • GTAP model
  • Nigeria
  • South Africa
  • trade agreements
  • welfare

ASJC Scopus subject areas

  • Computer Science (miscellaneous)
  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Environmental Science (miscellaneous)
  • Energy Engineering and Power Technology
  • Hardware and Architecture
  • Computer Networks and Communications
  • Management, Monitoring, Policy and Law

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