World Economic Forum (WEF). 2017. “www.weforum.org/reports/africa-competitiveness-report-2017The Africa Competitiveness Report 2017.” World Economic Forum, Geneva. Economic integration Forecasting models General equilibrium models International trade agreements Open economies Structural adjustment Barriers to trade Trade Trade Trade The average cost of importing a container into Africa is about $2,492 compared to $935 in East Asia and the Pacific and $1,488 in Latin America and the Caribbean (Brenton and Isik in 2012). Not surprisingly, intra-regional trade, although on the rise, remains relatively rare and accounts for only about 15% of Africa`s total trade, compared to 68% in Europe and 58% in Asia (Fofack, in preparation); Afreximbank 2018). In addition to non-tariff barriers, the state of government, the structure of production, the commercial direction inherited from the colonial model of resource production and supply restrictions play a role. Supply-restricteds include a low production base, expensive trade finance, limited access to information, and commercial infrastructure that is either missing or expensive. Not surprisingly, passive globalizers were more vulnerable to the risks of globalization. These include faster global transmission of negative shocks, fluctuations in commodity prices, a long-term deterioration in the terms of commodity trade, and a decline in global demand caused either by rampant protectionism or synchronized devastation. These risks have stifled the aspirations of backward nations, most of which are in vicious circles of excessive growth volatility and structural balance of payments crises. This may seem to indicate a significant macroeconomic impact on competitiveness. The free trade area could become a milestone on the road to Africa`s peace, prosperity and integration. Despite its devastating effects on Africa`s health and economy, the Covid-19 pandemic could be an opportunity to advance the free trade area in a more development-oriented, inclusive and mutually beneficial way for African countries.
The few African countries that have become the fastest growing economies over the past decade are also on a global upward trend in competition. These countries (notably Côte d`Ivoire, Ethiopia and Rwanda) are increasingly taking advantage of their improved competitiveness and macroeconomic environment to diversify their sources of growth and trade, while developing their share of the global pie. . . .