AFRICAN CONTINENTAL FREE TRADE AREA / AFRICAN CONTINENTAL FREE TRADE AGREEMENT (AfCFTA) AND THE TRANSPORT SECTOR IN AFRICA

AFRICAN Continental Free Trade Area / AFRICAN FINANCIAL FREE TRADE AGREEMENT (AfCFTA), AND THE TRANSPORT SECTOR in AFRICA (A CASES STUDY OF AIRLINE TRANSPORTATION SYSTEMS IN AFRICA

ABSTRACT

While not devaluing the importance of other industries, transportation is the only one that keeps everything in a country moving (Badejo, 2009). Like any other mode, air transportation is holistic. It includes the body, engine, and airport.

Data from the African Union Commission shows that transport costs in African countries are 63% higher than in developed countries. The West African countries successfully connected Africa’s coast to Europe during colonial times. However, they did not establish intra-African links.

It will take substantial investment to make up the years lost. Careful planning is required to connect the different regions in the most efficient manner possible; This includes considering the African geography and the departure point for each region.

The Economic Community of West African States has a relatively strong network via the West African highways system. It also has the most integrated maritime transport, with seven ports serving three landlocked countries. There are also plans to connect railway lines.

East African Community (EAC) has the most integrated waterways system linking Kenya, Uganda, and Tanzania. It is the largest of the five-member countries through Lake Victoria.

Five of the ten members of the Economic Community of Central African States are served by the Congo River; This is the second-most integrated inland waterways system. Southern Africa Development Community (SADC); This is the best-integrated air transport system in South Africa. Union du Maghreb Arabe (UMA), which uses a uniform gauge, and has a strong railway network, has the greatest integration potential.

The colonial masters did not intend to create an intra-African transport network.

TABLE OF CONTENT

Title page i

Certification ii

Dedication iii

Acknowledgment iv

Table of Contents v-vi

CHAPTER 1

1.1 Introduction ………………………………………………… ……………1

1.2 Statement of Problem …………………………………………………….. 2

1.3 Aims and Objective …………………………………………………….. 3

1.4 Purpose of study ………………………………………………………….. 4

1.5 Aims and Objective…………………………………………………………. 5

1.6 Significance of study …………………………………………………….. 5

1.7 Research Hypothesis …………………………………………………….. 6

1.8 Scope of Study …………………………………………………………….7

1.9 Limitation of study ………………………………………………………… 8

CHAPTER TWO

2.0 Literature Review ………………………………………………………… 9

2.1 Historical Background ……………………………………………………. 10

2.2 Negotiations …………………………………………………………………. 11

2.3 2018 Kigali (Rwanda) Meeting ………………………………………….. 12

2.4 Declaration signed at the 2018 Kigali, Rwanda (Rwanda), Meeting ……………… 13.

2.5 Drafting of other Protocols ………………………………………………. 16

2.6 Institutions …………………………………………………………………… 16

2.7 Implementation …………………………………………………………… 17

2.8 Membership ……………………………………………………………… 19

2.9 Nigerian Opposition ……………………………………………………… 20

2.10 List of Signatories and Parties to the Agreement……………………….. 23

2.11 Human Right Assessment ……………………………………………… 28

2.12 Complimentary Continental Initiative AfCFTA ……………………….. 28

2.13 Prospects and Challenges of AfCFTA …………………………………. 29

2.14 Airline Transportation in Africa ……………………………………….. 33

2.15 Air Transport History in Africa ……………………………………….. 35

2.16 Government Ownership ………………………………………………… 35

2.17 Fleet ……………………………………………………………………. 36

2.18 Alliance Participation …………………………………………………… 37

2.19 Safety ………………………………………………………………………… 38

2.20 Challenges and Prospects of Air Transport in Africa …………………….. 39

2.21 Single African Air Transport Market (SAATM) ………………………. 40

2.22 Yamoussoukro Decision ……………………………………………….. 41

2.23 History of Single African Air Transport Market (SAATM)……………… 42

2.24 Participation ………………………………………………………………. 43

2.25 Evaluation …………………………………………………………………. 43

2.26 Future Development – SAATM and Agenda 2036……………………….. 43

2.27 Prospects and Implications ……………………………………………… 44

CHAPTER THREE

3.1 Introduction ……………………………………………………………… 46

3.2 Population Study ………………………………………………………….. 46

3.3 Sources of Data ………………………………………………………….. 47

3.4 Data Collection Instrument ……………………………………………… 48

CHAPTER FOUR

ANALYSIS and PRESENTATION

4.0 Data Presentation, Analysis, and Interpretation ………………………………. 50

4.1 Introduction ……………………………………………………………… 50

4.2 Data Presentation ………………………………………………………… 50

4.3 Test of Hypothesis ………………………………………………………. 72

CHAPTER FIVE

5.0 Summary, Conclusion, and Recommendations ………………………….. 76

5.1 Summary ………………………………………………………………… 76

5.2 Conclusion of findings …………………………………………………… 77

5.3 Recommendations ……………………………………………………………… 78

Bibliography ……………………………………………………………………….. 80

Defined Terms ……………………………………………………………………… 82

Research Questionnaire ………………………………………………………….. 83

CHAPTER 1

INTRODUCTION/BACKGROUND OF THE STUDY

1.1 INTRODUCTION

Trade debates have dominated in the past decade, and Africa has voted for more trade. African countries signed the landmark African Continental Free Trade Area Agreement in March 2018. It commits them to remove tariffs on ninety percent (90%) of goods and progressively liberalize trade and services. The Agreement was successfully implemented to create an African market with over one billion consumers. Its total Gross Domestic Product (GDP) is more than three trillion dollars.

Africa will be the largest Free Trade Area (FTA). Other continental initiatives include free movement protocol, the Right of Residence and Right to the establishment, and the Single African Air Transport Market.

It is crucial to understand AfCFTA’s main drivers and the best way to exploit its potential and overcome its risks and challenges due to its size. AfCFTA’s signing in Kigali (Rwanda) comes at a moment when trade benefits are being actively contested. Global powers that have long promoted trade as a key growth driver are now questioning its fundamental principles. Transport is an essential tool in any country’s development. Transport facilitates the creation of many human activities, both economically and culturally (Kaderi, 2009). Trading is the most prominent global activity.

This project will involve extensive research into transport in Africa. Because of financial constraints, terrain, and rainy season, airlines have flourished in Africa. Ben R. Gutters, the author of Encyclopedia of African Airlines, stated that although most carries are not large enough to meet American standards, they have had a tremendous impact on the economy and the people.

1.2 STATEMENT ABOUT THE PROBLEM

It is very important to emphasize the importance of a continental trade agreement in launching a dynamic regional development process. This process will positively affect the African continent’s economy and allow it to compete favorably with other continental blocs around the world. This project will examine how the Agreement will be implemented, despite the abovementioned problems.

First and foremost, it will be important to determine whether or not the Agreement will be of greater value to all countries than their sub-regional or national interests.

The second is how to resolve the protocol for the free movement of persons.

The third is the right of individuals to establish and operate a business in their place of residence.

Fourth, the Single African Air Market will operate in Africa.

Let us talk about how the continent plans to address the currency, cultural, and security issues that could arise from any business agreement of this magnitude.

1.3 AIMS AND OBJECTIVES

This research work aims to analyze the effect of AfCFTA on the continent and show how other economic sectors, including airlines, can benefit from this.

Other objectives include:

  1. It is forging a bloc that can compete with other global blocs or continents, Asia, Europe, and America.
  2. The AfCFTA can encourage other areas of the African economy to grow.
  • In trade disputes with other continental blocs, trade agreements are used to protect the continent from invasion.
  1. To examine the role of airline transport in trade agreements as a major stakeholder.
  2. To see how AfCFTA could be used to create an internal mechanism on the continent to promote sporadic development in other areas.

1.4 STUDY PURPOSE

This study analyzes all aspects of Africa’s trade imbalance. It identifies the factors that cause the capital flight to other continent economies or global blocs, such as Asia, Europe, and the Americas. It is also important to critically examine why African Airlines cannot compete favorably with other continent’s counterparts in light of growing business in Africa and a large population.

1.5 SIGNIFICANCE DURING THE STUDY

This study aims to bring together all factors that are both continentally and internally generated and enable them to be used to foster trade agreements. All member countries should submit their own or sub-regional trade proposals secondary to the AfCFTA. African airlines should embrace the platform, which knows that trade within Africa is the best stimulus for profitable airline industry.

1.6 REQUEST QUESTION

This research examines the role of the African airline industry in AfCFTA in enabling it to bring economic prosperity to Africa. It also examines the bold steps that leaders across Africa must be prepared to take to positively impact the global economy and deal with other continent blocs. These are the main research questions.

  1. Can AfCFTA generate sufficient intra-African trade to be competitive enough against other continental blocs?
  2. Can African airlines handle the expected trade volume and traffic from this trade agreement?

1.7 RESEARCH

This research will use the Chi-Square (X 2) statistical analysis technique. Hypothesis 1 (H O) will test the factors of statements of questions and responses to form frequency tables to determine the relationship between AfCFTA/airline transport in Africa. Hypothesis 2 will be the alternative (H 1).

As shown below, these two main hypotheses will investigate the relationship between AfCFTA’s success and African air transport.

  1. AfCFTA’s success depends on a reliable, efficient, and effective airline transport system in Africa.
  2. AfCFTA’s success does not depend on strong, efficient, and effective airline transport in Africa.

HYPOTHESIS 1

H / – A strong, efficient, and cost-effective airline transport system in Africa is key to the success of the African Continental Free Trade Area / Agreement.

H: The success of the African Continental Free Trade Area / Agreement is not dependent on a strong, efficient and efficient air transport system in Africa.

HYPOTHESIS HTML2_

Statement of question responses will be used to determine if a Single African Air Transport Market can solve or not solve the air transport problems that will arise from AfCFTA.

1.8 STUDY SCOPE

This study will focus on AfCFTA and the efforts of various governmental bodies to achieve the objectives of increasing the African economy and encouraging intra-African trade to be more important than trans-continental. AfCFTA’s goals can also be achieved by bringing forward an important element of transportation (the airline), which is a catalyst.

1.9 LIMITATION TO STUDY

This research was done to provide an overview of the important steps that the African Union (AU) towards realizing AfCFTA’s goals and objectives. Important data are missing from the African Union (AU) because of differences in approaches by sub-regions and countries across Africa.

Most African airlines have been closed down by the governments of their respective countries. Many others have either closed down or gone out of business; This makes it difficult to access important information about this vital transport sector. The airlines are struggling to survive even under the new arrangement where the airlines are controlled and owned by the private sector. All efforts are directed towards making profits and less on data and database issues.

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