Free Trade for a Pan-African Future

Moussa Faki Mahamat, Chairperson of the African Union Commission. 13 December 2017. EPA-EFE/CHRISTOPHE PETIT TESSON

This Africa Day (on Friday) we must celebrate a change in consciousness. Ideologically, since the wave of decolonisation in the late 1900s, Africa has always been opposed to the West given the comparative history we share. However, institutionally, within government policy and economic development, Africa has in recent years become overly reliant on trade deals and support from our colonial past.

This is not to undermine the fantastic successes that some African countries have seen since their colonial independence rather that this experience is not homogeneous. Furthermore a far prevalent trend of economic inequality across most of the continent is a better indicator of the true “successes” of the current regional African economic model.

At an Extraordinary Summit on the Africa Continental Free Trade Area between 17-21 March the AU member states took a historic step towards a potentially bright new future. There were 44 of 55 member states which signed the consolidated text of the AfCFTA Agreement, 47 signed the Kigali Declaration, and 30 signed the Protocol for Free Movement.

This revolutionary step will give 1.2-billion people access to a regional market across all 55 states. It would potentially do away with all import duties across the continent and create the largest free trade area since the World Trade Organisation in 1995. Assuming all 55 states are cocoo-operative in this deal it would see a combined GDP of $3.4-trillion increase dramatically over the next few years as intra-African trade is expected to be boosted by 52.3%. UNECA’s African Trade Policy Centre (ATPC) and the African Union Commission (AUC) have stated:

AfCFTA is an opportunity for development in Africa. But it must be wielded by private enterprise. Through doing so, businesses can benefit from the great opportunities that the continent has to offer, and contribute to its sustainable growth and development.”

However will this free trade area have a positive affect on economic inequality in Africa? A large majority of the continent has struggled to successfully implement post-colonial transitional justice within their societies. This failure extends to economic justice and as a result economic inequality is widespread across the continent. Independently, the inequality is a result of each country’s specific conflict related reasons, however elite driven post-conflict economic empowerment at the expense of an oppressed majority or minority group is common. South Africa sports the highest GINI index (inequality indicator) of 63.4 and Algeria with 27.6 sports the lowest. The current regional economic model has allowed this reality to foster with great help from the western states or the west-driven IMF and WTO – however the advocates of the AfCFTA agreement argue that:

The main objectives are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union. It will also expand intra-African trade through better harmonisation and co-ordination of trade liberalization and facilitation and instruments across the RECs and across Africa in general. The AfCFTA is also expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.”

It can therefore be assumed that this deal will significantly empower local African businesses from bottom up. It will give new and/or small businesses an opportunity to expand their market reach as well as cut down on trade costs. If this model is followed through completely and co-operatively, it might have a great impact on the levels of poverty and inequality. Although it is important for the African people to cautiously go forward with this economic policy as a perfect Pan-African world is still far from existence.

The fact that this free trade area will be developed over the next few years as well as a potential for an AU passport in the future indicate that Africa are taking important steps in the right direction. However there are still some issues that still need to be considered.

The AU needs to consider the reality of many post-conflict states in Africa. This reality is that a variety of states, despite the “post-conflict” status, are still experiencing serious civil strife amongst differing groups within their borders. Burkina Faso is one of the states that signed all three documents at the Extraordinary Summit in March. However in the last three years it has suffered from a jihadist-insurgency that has resulted in much violence. South Sudan is another state that has signed all three documents but is also still a war-torn area. In the western areas of the country there has been a recent eruption of violence despite a unilateral ceasefire announced in March.

The existence of violent conflicts in Africa, especially the ones motivated around ethnic, religious or cultural divisions, will not allow for free trade or free movement. In order for this free trade area deal to work there needs to be Pan-African co-operation – something of which might be difficult to ask of warring and extremist areas of the continent.

Furthermore this deal comes off the backdrop of a mass African exodus from the ICC, as well as recent clashes between the United States super power and various African states, South Africa included. However as the relationship between Africa and the West strains – it is important to look at this trade deal as an opportunity.

The Trumpian state is unpredictable and precarious as seen when South Africa was specifically threatened with not being exempt from the high steel and aluminium import duties – despite the trade relations with the US in the past.

These Trumpian tantrums could have a serious impact on Africa however still the possibility of AfCFTA represents a brighter and more self-sufficient future for Africa. It may be an extremely important and revolutionary step for true decolonisation and towards an empowered Pan-African reality. As with any economic policy, caution must be taken, but the potential for a positive change is certainly something to celebrate this Africa Day. DM

Kimal Harvey is a Peace Building Interventions intern at the Institute for Justice and Reconciliation


Please peer review 3 community comments before your comment can be posted