**1. Introduction**

Africa's most ambitious trade initiative, the African Continental Free Trade Area (AfCFTA) agreement, was signed and launched at the African Union (AU) Assembly on 21 March, 2018 in Kigali, with the agreement fully coming into force on 30 May, 2019. Out of the 55 member states, 34 countries have both signed and deposited their instruments of AfCFTA ratification. However, due to the political situation in Eritrea, the country has yet to join the agreement.

The AfCFTA agenda is to boost intra-African trade by around 60% by 2022. The agreement was necessitated by the low level of intra-African trade before the signing of the agreement. Data from the African Development Bank (AfDB) showed for example that trade among African countries was about 10% in 2000. Fourteen (14) years afterward, in 2014, and prior to the signing of the AfCFTA agreement, even though intra-African trade had increased, the continent recorded barely a 6%

increase in intra-Africa trade, over the 2000 base level [1]. Thus, despite the intensification of bilateral intra-African trade agreements over the past two decades, still, only 16% of international trade by African countries took place within Africa in 2014.

A number of empirical and anecdotal evidence have shown the importance of intra-regional trade on poverty reduction. For example, regional organizations' are better positioned to link regional trade to region-wide health, education, social protection, and other public goods policies, and therefore provide a platform to strengthen global, regional, and national actions on poverty reduction [2]. A number of researchers have emphasized the intra-regional trade, employment/ income linkages [3–5], whereas others emphasized the intra-regional trade and investment linkages [6–8], and how these linkages do impact poverty at national and regional levels. Das [9] argues that the linkages need to be analytically understood and empirically examined to make regional cooperation initiatives development-oriented.

Nudging free trade by eliminating bottlenecks associated with intra-regional trade can be pivotal towards addressing poverty and food insecurity in many parts of Africa (see [10]). Others argue that the advantage of intra-African trade is not solely in the production and trade of raw food products and thereby reducing food insecurity, but also countries with more advanced manufacturing sectors hold potential for Africa's growth, and a reduction in imports if such countries in Africa can access the larger African market (see [1]). However, despite the need for stronger economic cooperation in developing countries, Das [9] intimate that there are very few regional economic integrations in the developing world, with many successful economic groupings found in the developed world.

For example, despite the potential effect of economic integration, evidence from ASEAN countries, namely Indonesia, Malaysia, Philippines, Singapore, and Thailand have shown the limited effect of small level integration schemes on trade. Specifically, Sharma and Chua [11], for example, found that the ASEAN integration scheme did not increase intra-ASEAN trade, but an increase in trade occurred with members of a wider Asia-Pacific Economic Cooperation (APEC) group. Kweka and Mboya [12] found that regional integration with the Southern African Development Community (SADC) and East African Community (EAC) led to increased trade and employment within the region. Evidence from the Economic Community of West African States (ECOWAS) which adopted its 'West African Common Industry Policy' in 2010 saw an increase in intra-regional trade and increased creation of high-quality jobs but faced high trade cost which prevented less productive firms from entering the regional market (see [5] for more details). For the countries of the Middle East and North Africa (MENA) in the Arab- Maghreb Union (AMU), the Greater Arab Free Trade Area (GAFTA) which was meant to increase trade between MENA countries and that of other Arab countries was initially limited to goods liberalization and did not include trade facilitation among its provisions, and therefore had little impact on regional trade due to restrictive non-tariff measures and inefficient cross-border measures (see [13, 14]). However, full trade liberalization in the GAFTA led to a significant increase in intra-regional exports, particularly for the Maghreb sub-region, where export growth reaches around 6% [13].

The African continent is made up of 55 countries and if all countries would negotiate a bilateral trade agreement with all other African countries, there would be 1,485 bilateral FTAs (55 x 54 divided by 2) [15]. A number of authors have argued that the multiple memberships of numerous regional economic communities (RECs) have seemingly contributed to the slow progress of inter-regional integration on the African continent [16, 17]. Thus, even though there are benefits to sub-regional bloc integration i.e., ECOWAS, EAC, SADC, and AMU, a universal

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

trade bloc that encompasses all the sub-regional blocs would have a much better potential to increase trade, and as such stand a chance of making a significant push towards reducing the severity of poverty in Africa. It is in this spirit, that the African Continental Free Trade Area (AfCFTA) was mooted and signed by many African countries across the various traditional economic blocs.

This chapter discusses the short and long-run effects of the COVID-19 related shocks on the success or otherwise of the African Continental Free Trade Area (AfCFTA) agreement, and how such outcomes can impact the welfare of the poor. The discussion also explores the channels through which the COVID-19 shocks are transmitted, namely through consumption, production, and market-based labor activities.
