Algeria at the Core of the AfCFTA: Pioneering Economic Integration in Africa

BY: Dr. Hana Saada  

Algiers, Algeria | November 03rd, 2024 — November 1, 2023, marked a defining economic milestone for Algeria as the nation officially commenced trade within the African Continental Free Trade Area (AfCFTA), positioning itself at the forefront of one of the world’s most ambitious economic integrations. This historic step grants Algeria access to a vast African market of over 1.3 billion consumers across 54 nations, opening unprecedented prospects for growth and economic exchange.

Algeria’s accession to AfCFTA, strategically laid out since signing the trade agreement in Accra, Ghana, in 2021, reflects years of preparation aimed at fully integrating into this highly competitive but lucrative continental market. National authorities have launched extensive initiatives to enhance Algeria’s presence within AfCFTA, focusing on modernizing the customs system, opening Algerian bank branches across Africa, and establishing free zones to facilitate trade. These projects underscore Algeria’s commitment to increasing intra-African commerce, tapping into continent-wide markets in alignment with the goals of the Abuja Treaty and the aspirations of the African Union’s Agenda 2063, which envisions a continental market with seamless movement of people, goods, and capital.

Prominent economist Nadir Merah, former head of the African Union’s Trade Division and interim director of its Trade and Industry Department, noted that Algeria’s approach aims to “stimulate intra-African trade and establish a robust presence in African markets.” According to Merah, Algeria’s early implementation of the AfCFTA agreement underscores its leadership in adapting to regulatory frameworks that streamline trade across Africa, creating a unified tariff and tax regime that ensures smoother, more efficient transactions across borders.

However, Merah emphasizes that while Algeria has made strides in production, maintaining high productivity will be essential to meet the continent’s growing demand. He pointed out that Algerian goods, which already meet international quality standards, now need to maintain elevated productivity levels to meet the needs of African consumers effectively. This approach requires in-depth market studies to identify and target the most promising African markets.

For Algeria, Africa is a natural fit for its exports. With competitive products ready to compete with those of neighboring countries, Algeria is urged to conduct strategic analyses to pinpoint the AfCFTA’s most lucrative target markets. Merah advocates an “offensive” trade strategy for Algerian operators, encouraging them to explore markets beyond traditional strongholds and seize emerging opportunities in regions like East and Central Africa, where demand is burgeoning.

Despite language barriers in Anglophone countries, Merah insists that Algeria’s operators should not view this as an obstacle, as the AfCFTA provides ample support for businesses seeking to penetrate diverse linguistic regions.

In addition to enhancing logistics, the economist highlights the critical need for tailored banking and insurance solutions to support Algeria’s continental strategy. “The establishment of banks specializing in import-export operations could strengthen this approach, and Algerian bank branches in the AfCFTA’s 54 countries would amplify Algeria’s economic footprint on the continent,” Merah stated.

The expert also underscores the need for a robust logistical infrastructure. Effective exports to Africa will require a structured logistics framework, including projects such as expanding Tamanrasset airport into a key transit hub for cargo flights and establishing free trade zones in southern Algeria. These measures, Merah suggests, are integral to Algeria’s broader ambition to become a pivotal trade partner within the AfCFTA, advancing its economic influence and solidifying its role in the future of African trade and development.

Translated with adaptation from: 

https://www.horizons.dz/?p=184209

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