Just how real or fair would an African common market be?
- Sipho Hlongwane
- 23 May 2011 08:20 (South Africa)
In December 1985, Kenneth Kaunda, then president of Zambia outlined his vision for Africa that would finally free the continent from its last colonial shackle - chronic economic dependence on the West. He envisaged a 20-nation African common market, where trade could take place freely and Africans could work together for mutual benefit. Kaunda recognised trade was an integral (and perhaps the most important) part of economic prosperity. Unfortunately, his African counterparts saw the issue differently and to this day his dream has yet to be realised. Organisations like the Southern African Developmental Community are weak and ineffective, and inter-African trade is still extremely difficult. In many ways Kaunda’s idea was far ahead of its time.
The signs are positive these days. Five east African countries have recently revived the East African Community, with a view to establishing pro-market, pro-private sector and pro-liberalisation economic policies across their borders. Other African trade and economic blocs are being formed all over the continent, with varying degrees of success. Liberal trade ideologies have swept the continent and not a moment too soon either.
None of this would mean anything if the money that runs this continent wasn’t in on the plan too. While China’s intentions in Africa aren’t entirely transparent, the government of the US has thrown its weight behind the idea of the African common market. The current administrator of the US Agency for International Development (Usaid) Rajiv Shah said to journalists in Johannesburg “The African common market has the potential to be one of the largest common markets around the world and the US is committed to being an effective partner to countries and organisations to help build that common market over time.”
Shah was speaking within the context of the US’s aid and developmental commitments within the African continent. The Obama administration has fought for and managed to retain the record aid budgets rolled out by George W Bush - an extraordinary achievement, given the hostile budget environment this year on Capitol Hill. Programmes like the President’s Emergency Plan for AIDS Relief (Pepfar) and Feed the Future (a food security programme) have been kept.
South Africa is currently the largest recipient of Pepfar aid, which supports the ARV programme of the department of health.
“I would submit that President Obama has submitted and fought effectively for the largest ever development and global health budget in history,” Shah said. “He has fought in this last round of negotiation effectively to maintain high levels of commitment to antiretroviral therapy and Pepfar, as part of a larger commitment to sub-Saharan African in areas like food security. [The budget environment] does require that we do some things differently. We are working hard to improve our partnerships with the private sector so that we get more leverage for each dollar investment. We believe that private investment will be the engine of growth and stability on this continent and we want to motivate as much effective private investment as possible.
“We’ve instituted a more rigorous evaluation policy so that our commitments on the continent are reaching the poorest communities and achieving real results,” said Shah.
I have criticised the aid model adopted by the US in previous decades, but the aid model does have its merits in the post-recession age. Not only does it “aggressively” pursue investment results, it rewards governments that comply with transparency and effective governance requirements with continued flow of aid cash. This is precisely what has been lacking from previous “just throw mounds of cash at the problem” aid models.
“Our Feed the Future programme seeks to help move 18 million people out of a state of poverty, including 7 million children under the age of five who otherwise suffer from malnutrition. So by setting tangible goals and measuring aggressively to make sure we get results, we believe we can get more value for our investments,” Shah said. “Our Feed the Future programmes in Africa are market-orientated strategies and when one looks across history, one of the reasons African agricultural development has not grown at the same rate as every other continent has been a relative lack of a focus on developing resources and viable markets.”
Though it may be argued that different types of aid should be examined separately, I believe since they seek to achieve the same end in the final result, they should be treated as different building blocks in the final picture. To my mind, there is no difference between what Pepfar, Feed the Future and the African common market seek to achieve. Economic growth will be destroyed by disease and issues with food security if they aren’t all treated as roots of the same tree. In recent years, the US has adopted a more holistic approach to aid, which must be praised.
But still, there is a dangerous underlying assumption that goes unexamined by the US’s “agricultural economy” intervention in Sub-Saharan Africa. The idea of the African common market is one of the best developmental ideas we’ve ever seen, but it also fails to acknowledge that Africa cannot achieve the necessary levels of economic growth by treating its marketplace as an insular playing field.
The greater global context of economic interconnectedness means policies implemented in Europe and the US will continue to harm Africa. The foundations of Europe’s current economic development were laid centuries ago through greater ease of trade throughout the continent, and the US itself saw massive economic expansion through ease of trade across states within its borders. But the same idea cannot achieve similar results in Africa. Back in the 18th and 19th centuries, globalisation was practically nonexistent. It is very real today, and the policies crafted in the corridors of the US Capitol and the European Parliament have to reflect that.
Thanks to globalisation and world trade, agricultural subsidies of the European Union and the US have a detrimental effect on African agriculture. These subsidies will continue to hobble Africa, no matter how successful developmental projects in the market are, nor how liberal the African common market becomes. DM
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