The African Continental Free Trade Area and Demand for Transport Infrastructure and Services

Abstract

The African Continental Free Trade Area (AfCFTA) agreement entered into force in 2019. It aimed to increase intra-African trade by eliminating import duties. Its planners hoped to double intra-African trade if non-tariff barriers were also reduced. It was a major milestone in the continent’s regional integration. Inadequate transport infrastructure and services could hamper the realization of AfCFTA’s benefits. The urgent need to improve transport connectivity in Africa in the context of AfCFTA has created new research demands. This report explored the effects of AfCFTA on trade flows in the African region and asked how the AfCFTA signatories could reap the agreement’s full benefits through the integrated planning of trade and transport. The report’s specific objectives were to forecast the demand for different modes of transport—road, rail, maritime and air because of AfCFTA; Estimate the infrastructure investments required for different modes of transport; Estimate the impact of improvements in transport infrastructure and services on the volume of intra-African trade; Forecast the demand for equipment for different modes of transport—trucks for roads, rolling stock for railways, aircraft for air transport and ships for maritime transport—because of AfCFTA. The study constructed four scenarios based on the factors that have the highest impacts and are most uncertain. Such factors fell into two categories: AfCFTA implementation and socio-economic development; Transport services and infrastructure.