Description
Explain why are African countries more likely to trade with Europe and America than they are with each other?
What could the impact of CFTA be on Africa? Discuss.
What will African countries need to do to make the TFTA a success? What are the likely impediments to doing this?
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المملكة العربية السعودية
وزارة التعليم
الجامعة السعودية اإللكترونية
Kingdom of Saudi Arabia
Ministry of Education
Saudi Electronic University
College of Administrative and Financial Sciences
Assignment 2
Introduction to International Business (MGT 321)
Due Date: 02/11/2024 @ 23:59
Course Name: Introduction to International
Business
Course Code: MGT321
Student’s Name:
Semester: First
CRN:
Student’s ID Number:
Academic Year:2024-25-1st
For Instructor’s Use only
Instructor’s Name: Dr. Abdulelah Alnafisah
Students’ Grade:
/Out of 6
Level of Marks: High/Middle/Low
General Instructions – PLEASE READ THEM CAREFULLY
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The Assignment must be submitted on Blackboard (WORD format only) via allocated folder.
Assignments submitted through email will not be accepted.
Students are advised to make their work clear and well presented, marks may be reduced for poor
presentation. This includes filling your information on the cover page.
Students must mention question number clearly in their answer.
Late submission will NOT be accepted.
Avoid plagiarism, the work should be in your own words, copying from students or other resources
without proper referencing will result in ZERO marks. No exceptions.
All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures
containing text will be accepted and will be considered plagiarism).
Submissions without this cover page will NOT be accepted.
Learning Outcomes:
Knowledge:
1.1: Identify and evaluate the significant trade agreements affecting global commerce.
1.2: Discuss the reasons and methods of governments' intervention in trade.
Skills:
2.1: Analyse the effects of culture, politics and economic systems in the context of international
business
Critical Thinking
Please read Case 9: “Free Trade in Africa” available in your e-book (International business:
Competing in the global marketplace (13th ed.), at page no.639, and answer the following
questions:
Assignment Question(s):
1. Explain why are African countries more likely to trade with Europe and America than they
are with each other?
(Minimum words: 400,)
2. What could the impact of CFTA be on Africa? Discuss.
(Minimum words: 400,)
3. What will African countries need to do to make the TFTA a success? What are the likely
impediments to doing this?
(Minimum words: 600,)
Important Notes:
• This is an individual assignment.
• All references must be cited using APA format. This includes both in-text citations and
the reference list at the end of the document.
• Originality, Similarity and Plagiarism Check: Your work must be original. All papers will
be submitted through SafeAssign software to check for similarity and plagiarism. Any
instance of academic dishonesty will result in a grade of zero for the assignment. No
exceptions and no second chances!
Answers
1. Explain why African countries are more likely to trade with Europe and America
than with each other.
The tendency of African countries to trade with Europe and America rather than with one
another reflects several structural and systemic barriers standing in the way of intra-African
trade. Among these are high tariff and regulatory barriers within Africa. Unlike Europe, where
60% of the total trade is intra-continental, only 19% of Africa's $930 billion trade is intracontinental (Hill et al., 2022). This disparity partly emanates from the trade policies of the region
since African firms face an average tariff of 8.7 percent for intra-continental trade. A lower
average tariff of 2.5 percent affects exports to international markets (Hill et al., 2022). Many
African countries also maintain unwieldy customs procedures, time-consuming border
inspections, and endless paperwork that slows down cross-border movements of goods
(Aglionby, 2016).
Infrastructure issues are also major hurdles to trade across Africa. The non-availability of
an inter-connected road, rail, and port network is one of the major hindrances to the smooth
transportation of goods. For instance, it takes three weeks for a shipping container to cover only
700 miles from Mombasa in Kenya to Kampala, Uganda, due to poor transportation
infrastructure and customs delays (Hill et al., 2022). Conversely, goods from African countries
to European or American ports move via faster and more reliable logistic networks, making
those markets attractive and accessible to African exporters.
Other challenges include the continent's economic structure, which relies heavily on
exporting unprocessed commodities rather than manufactured goods. Most African economies
depend on exporting unprocessed raw materials such as minerals, oil, and agricultural produce to
developed economies of the continent, where these commodities are more valuable (Stevis &
McGroarty, 2015). Given that intra-African trade would, in an ideal setting, be comprised of
finished or industrial and consumer goods, this reliance on raw commodities certainly restricts
the chances of trade within Africa. This situation is further compounded by the low level of
industrialization across the African continent, with the manufacture of finished products that
could be traded between countries of the region largely absent.
The situation is notably worsened by restrictive agreements that bind the African nations
into unhelpful trade circles. For instance, SADC rules on local content require that textiles and
garments traded within the region are manufactured and sourced within the region. However,
limited textile production capacity restricts the growth of this sector. Since such r...
