Structured Solidarity and Sustainable Integration: Fiscal Equalisation, Regional Development Policy, and the Political Economy of AfCFTA

Raymond Saner () and Lichia Saner Yiu
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Raymond Saner: Unibas - Université de Bâle = University of Basel = Basel Universität
Lichia Saner Yiu: Centre for Socio-Eco-Nomic Development - CSEND

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Abstract: Economic integration generates asymmetric gains across participating economies. Without institutional mechanisms to manage resulting disparities, integration risks political backlash and fragmentation. This paper argues that the long-term sustainability of the African Continental Free Trade Area (AfCFTA) depends on embedding structured solidarity mechanisms comparable in principle—though not institutional form—to Switzerland's National Fiscal Equalisation (NFA) system and its complementary New Regional Policy (NRP), as well as to cohesion and equalisation frameworks in Germany, Canada, Australia, and the European Union. Drawing on comparative fiscal federalism and supranational integration experience, the paper demonstrates that durable integration regimes combine competition with rule-based redistribution and structured development programming. Empirical evidence on intra-African trade trends underscores persistent structural asymmetries under AfCFTA. Building on these insights, the paper proposes the creation of an African Equalisation Facility (AEF) structured around a stabilisation window and a transformation window. The paper contributes by linking comparative equalisation systems to the institutional design of AfCFTA and proposing an operational framework for managing integration-induced asymmetries in Africa.

Keywords: African Continental Free Trade Area (AfCFTA); Fiscal Equalisation; Regional Integration; Structural Asymmetry; African Development (search for similar items in EconPapers)
Date: 2026-06-24
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