Trade Policy, Trade, and Industrialisation in a De-globalised World

This chapter examines the complex interplay between Africa's trade policy, trade flows, and industrialisation against the backdrop of a de-globalising world. Historically, colonial-era resource extraction and post-independence policies like import-substituting industrialisation (ISI) and structural adjustment programmes (SAPs) failed to spur sustained industrial growth, leaving Africa reliant on commodity exports and vulnerable to global market fluctuations. The African Continental Free Trade Area (AfCFTA) emerges as a pivotal strategy to counter de-globalisation trends – such as protectionism and geopolitical fragmentation – by fostering intra-African trade, which is dominated by manufactured goods and could drive diversification. While AfCFTA's unified market offers economies of scale and potential export growth (up to 109 percent in intra-African trade), risks persist for small- and medium-sized enterprises (SMEs) and sectors reliant on outdated colonial trade models. Successful implementation requires robust regional cooperation, trade facilitation, and policies that prioritise value addition over raw material exports. By leveraging regional integration, Africa could transform its economic landscape, enhancing resilience and positioning itself competitively in a de-globalising world.