**3. Pre COVID-19 trade**

Putting the effect of the COVID-19 pandemic on the AfCFTA and trade volumes into perspective, it is important to first highlight the state of trade within Africa prior to the coming into effect of the AfCFTA. In 2016, prior to the signing of the AfCFTA, the total intra-African exports amounted to USD 62.2 billion. Earlier data from 2000 to 2010 shows relatively very low values of intra-African trade (see **Figure 1**). Over the period, intra-African imports represented an average of 14.2 percent of total African imports, while intra-African exports represent 10.4 percent of total African exports. Altogether, over the period 2000 to 2010, intra-African imports amounted to USD 29 billion whereas, intra-African exports amounted to USD 30 billion [20].

Overall, intra-African trade data have shown low levels of regional trade on the African continent prior to AfCFTA and the pandemic (see **Figure 2**). Total exports, for example from the Northern African region to other countries in the northern region, amounted to 5% in 2011, whereas exports from the Northern African region to the other individual regions on the continent amounted to 1% or less of total exports [16, 21]. Total export within a region is highest for exports within the Eastern bloc (EAC), where total exports from the Eastern Africa African region to other countries in the east amounted to 15% in 2011. For the other regions, exports within a bloc are less than 10%. For example, total exports from the Southern African region to other countries in the south, and that from Western Africa to other countries in the west accounted for 8% of the bloc's exports. As shown by

<sup>1</sup> https://theindependentghana.com/2020/07/world-bank-forecasts-afcfta-to-boost-africas-incomeby-us450bn/

*The COVID-19 Pandemic and African Continental Free Trade Area (AfCFTA): Exploring… DOI: http://dx.doi.org/10.5772/intechopen.97394*

**Figure 1.**

*Intra-African trade from 2000 to 2010 (billions of US dollars). Source: Statistics division, AUC.*

**Figure 2.** *Inter-African trade within blocs 2011. Source: Jordaan [16].*

**Figure 2**, prominent inter-bloc trade took place between the east and south (EAC-SADC), and west and south (ECOWAS-SADC), which accounted for 4% of total exports in both cases.

**Table 1** below highlights some major bilateral intra-African exports on the continent prior to the signing of the AfCFTA agreement in 2017.

**Table 1** indicates that the largest single value of bilateral trade took place between Nigeria and South Africa, followed by Ghana and South Africa. Overall, the share of intra-African exports as a percentage of the continent's total exports stood at 16.6% in 2017 [22]. From the data, the top five (5) intra-African exporters are South Africa, Nigeria, Ghana, Angola, and Algeria. The expected benefits from the AfCFTA will to a large extent depend on the country's pre- AfCFTA bilateral intra-African trade volumes. Countries with a lower share of pre- AfCFTA intra-African trade will benefit significantly from this agreement.


#### **Table 1.**

*Major bilateral export relationships.*

Data from West Africa is quite interesting in terms of highlighting the composition of intra-African trade. Von Uexkull [5] noted that for some countries the share of manufactured good is substantially higher among other ECOWAS countries than exports to global markets. For example, Benin exports manufactured food, beverages and Tobacco and some construction materials (steel and cement) to the ECOWAS countries while for the rest of the world their main export is cotton. Cote d'Ivoire exports mainly refined petroleum products to ECOWAS and cocoa/cocoa butter to the rest of the world. For Ghana, the country exports manufactured wood, plastic and textiles to ECOWAS, semi-processed gold to South Africa and mainly cocoa to the rest of the world. Togo, the country with the highest share of intra-ECOWAS trade (59%) exports steel, cement, packaging materials and food products (margarine, flour, mineral water) to ECOWAS and cocoa/mining phosphates to the rest of the world (see [5] for a detailed breakdown of intra-ECOWAS trade).

Trends in the share of total merchandised export of the top five (5) countries in Africa's export (see **Figure 3**) prior to the pandemic provides evidence on the potential of AfCFTA in improving total trade volumes for countries with traditionally small levels of export. The data as presented in **Figure 2** shows that, from the 1980s, except Angola and Morocco that has experienced marginal increases in their African export shares, large countries such as South Africa, Nigeria, and Algeria has seen a decline in their share of Africa's export. One would expect that the structures instituted under the AfCFTA will empower not only the traditionally large export countries in Africa but also help empower small countries with low trade potentials and limited pre- AfCFTA export volumes to expand export.

In addition, data collected prior to the agreement and outbreak of the COVID-19 pandemic showed that the majority of enterprises in Africa considered customs and trade regulations as a major constraint to trade. Precisely, Stuart [24] found that the percentage of African enterprises identifying customs and trade regulations as a major constraint is almost 40% higher in Africa than in the rest of the world. The AfCFTA aims to eliminate import duties and reduce non-tariff barriers significantly. Thus, improving trade procedures through enhanced trade facilitation should reduce bottlenecks associated with intra-African trade.

*The COVID-19 Pandemic and African Continental Free Trade Area (AfCFTA): Exploring… DOI: http://dx.doi.org/10.5772/intechopen.97394*

**Figure 3.**

*Share (%) of top five countries in Africa exports. Source: Verter [23].*

We argue that despite the enormous potential in using intra-regional trade to help reduce poverty and food insecurity in some part of Africa, the strength of these linkages both in the short and long-term will depend on the direct effect of the COVID-19 pandemic on the implementation of the trade agreement, and on the institutional structures that are in nascent stages.
