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AFRICAN CONTINENTAL FREE TRADE AREA (AfCFTA) AND POVERTY REDUCTION IN NIGERIA: AN EXPLORATION OF THE POSSIBILITIES

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Abstract

The creation of a free trade area such as the African Continental Free Trade Area (AfCFTA) was long overdue given the benefits member nations would have derived from it at least when drawn from the experiences of other regional and sub-regional economic integration bodies. One benefit envisaged is the reduction in poverty of member nations. This study, therefore, explored the possibilities of AfCFTA reducing poverty in Nigeria when fully operational taking into consideration the African Regional Integration Index (ARII) drawn from the dimensions and indicators of regional integration (such as the free movement of people, trade, macroeconomic, productive and infrastructure integrations). Available data on the values of these indexes showed that Nigeria's regional integration index on the free movement of people, trade, macroeconomic, productivity and infrastructure are weak because the country performed poorly in all the five dimensions of African Regional Integration Index (ARII). This by implication is likely to deter the contribution of AfCFTA to poverty reduction in Nigeria in the future unless measures such as the improvement in production in the agricultural, manufacturing and solid mineral resource industries are affected. Massive infrastructural development that would necessitate investment (especially foreign direct investment), production and trade across borders, free movement of people (especially, the most productive and skillful workforce are also affected). Stability in key macroeconomic variables (e.g. inflation, interest and exchange rates) across borders is essential to help ease foreign businesses and investments and create healthy banking and financial climate.

Suggested Citation

  • Ijaiya, T.A. & Ijaiya, G.T. & Ijaiya, M.A., 2021. "AFRICAN CONTINENTAL FREE TRADE AREA (AfCFTA) AND POVERTY REDUCTION IN NIGERIA: AN EXPLORATION OF THE POSSIBILITIES," Ilorin Journal of Economic Policy, Department of Economics, University of Ilorin, vol. 8(3), pages 21-35, June.
    • Handle: RePEc:ris:ilojep:0048
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    References listed on IDEAS

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    1. Jaime de Melo & Jean-Marc Sollede & Zakaria Sorgho, 2020. "Working Paper 342 - Market Integration Across Africa:Progress and Challenges Ahead," Working Paper Series 2468, African Development Bank.
    2. -, 2021. "United States economic outlook: 2020 in review and early 2021 developments," Oficina de la CEPAL en Washington (Estudios e Investigaciones) 46851, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    3. Zerihun G. Alemu, 2019. "Working Paper 327 - Poverty in Nigeria: A Multidimensional Approach," Working Paper Series 2453, African Development Bank.
    4. Liviu C. Andrei, 2012. "The economic integration: concept and end of process," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania / Editura Economica, vol. 0(10(575)), pages 55-70, October.
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    1. Hauwah K. K. Abdulkareem & Sodiq Olaiwola Jimoh & Ebenezer Olubiyi, 2023. "Trade–peace conundrum in Africa: The moderating effects of poverty and inequality," African Development Review, African Development Bank, vol. 35(4), pages 323-335, December.

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    More about this item

    Keywords

    Africa; Free Trade; Regional Integration; Poverty; Poverty Reduction; Nigeria;
    All these keywords.

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F18 - International Economics - - Trade - - - Trade and Environment
    • F22 - International Economics - - International Factor Movements and International Business - - - International Migration
    • F36 - International Economics - - International Finance - - - Financial Aspects of Economic Integration
    • F53 - International Economics - - International Relations, National Security, and International Political Economy - - - International Agreements and Observance; International Organizations
    • F55 - International Economics - - International Relations, National Security, and International Political Economy - - - International Institutional Arrangements

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