IDEA
Hails the Africa Continental Free Trade Agreement
(AfCFTA)
IDEA
Editorial
March 30, 2018
Ghelawdewos
Araia, PhD
We
at the Institute of Development and Education for
Africa (IDEA) are delighted to witness the
launching of the continental free trade area that
would, in effect, supersede all existing regional
blocs like ECOWAS, SADC, COMESA, etc without
contradicting or contravening the mission and
objectives of the latter. At long last, the Africa
must Unite motto of the 1958 Accra conference,
then attended by only eight independent African
countries, will become a reality. On May26 1963,
the pan-African movement to unite Africa
culminated in the signing of the OAU Charter by 31
African countries. The OAU became AU (African
Union) in May 26 2001, and between the
establishment of the Organization for African
Unity (OAU) and AU, a significant number of
regional organizations were founded, but the idea
of integrating the entire continent was conceived
long before the AfCFTA was signed by forty-four
African countries on March 21, 2018 at Kigali,
Rwanda.
In
1991, i.e. 27 years ago, African countries have
signed an agreement at Abuja, Nigeria in regards
to the formation of African Economic Community; to
this effect, some blocs like the Southern African
Development Community (SADC) and the Common Market
for Eastern and Southern Africa (COMESA) signed an
agreement to create a trade bloc of 26 countries.
Following the SADC/COMESA agreement, African trade
ministers have reached an agreement at continental
level on December 2017, and it is based on all
these initiatives that the AU announced on January
2018 of the signing of the AfCFTA on March of the
same year.
With
the exception of some countries like Nigeria,
Uganda, and Burundi, the majority of African
countries have endorsed the AfCFTA, and the new
continental trade regime will come into effect by
2020 if the Agreement is ratified by 22 countries,
a number that is necessary and required for the
legitimacy of the new African free trade.
Once
it comes into full force, the AfCFTA, will have a
major impact on the industrial development and
trade linkages of the respective African
countries. First and foremost, it will effectively
integrate the African continent via open borders,
transcending regional bloc regimes, eliminating
tariffs, reforming customs and border regulations,
and attracting both African and international
investors. The AfCFTA, above all, will enable
African countries to promote export-led
industrialization, and as a result a new wave of
export-oriented goods will become the dominant
facet of the AfCFTA intra-African trade and the
collective trade of the continent with Europe,
Asia, North and South America, as well as the
Caribbean. The new Africa continental trade, thus,
will stimulate foreign direct investment (FDI),
while at the same time exploiting the potential of 1.2
billion people and a $3.4 trillion combined GDP.
However,
in order to meaningfully and effectively translate
its mission and objectives, the AfCFTA must meet
some preconditions ahead of time: 1) African
countries must diversify their economies and
graduate from a monoculture commodity production
to a wide ranging agricultural and industrial
output; 2) African countries must expedite
industrialization and promote value-added products
(or manufactured goods) for African and world
markets; 3) as agreed upon in the Kigali summit,
tariff and non-tariff barriers should be
eliminated in order to significantly boost
intra-African trade; 4) the AfCFTA must resolve
the multiple and overlapping membership of trade
blocs as stipulated in Article 3 of the Preamble
of the Agreement; 5) the AfCFTA must be
accompanied by security measures in order to ward
off counter-progressive forces such as Al Shabab
and Boko Haram, and sabotaging underground
activities such as contraband illegal
transactions; 6) the AfCFTA should seriously
consider the uneven development level of African
countries and make necessary adjustments,
including affirmative action and subsidy programs.
On
top of the above preconditions, the AfCFTA should
also meet the following criteria: 1) the AfCFTA,
as a matter of course, should have a visionary and
capable leadership and an efficient and effective
structure; 2) the AfCFTA must have a strong
evaluating and monitoring system; 3) the
respective member countries of the AfCFTA must
initiate infrastructures such as highway roads and
railway communication networks as well
as power services in order to attract
investors.
If
the above preconditions and criteria are
fulfilled, Africa can boast a higher percentage of
intra-African trade. Currently, the intra-African
trade of 16% is relatively low compared to 19% of
Latin America and 51% of Asia, but it is highly
probable that Africa could garner 52% of trade if
the preconditions and criteria are met.
One
promising thing that the AfCFTA could be effective
has to do with the design and structure of the
continental regime. Although the AfCFTA is
accountable to the AU, it will assume an
autonomous status and will have its own
secretariat; it will be led by heads of states
conferences or semi-parliament, and a committee of
senior trade officials; and it will incorporate
specialized professional bodies yet to be
negotiated.
Africa
has been staggering to rise up for the last five
decades, and now, it looks, the time has arrived
for Africa to stand up on its feet; fifty-four
strong feet (fifty-five, if Somaliland is added)
to march together and pull together (harambee);
the ultimate objective is not only to create a
free continental trade area but also to connect
Africa by railway from Dakar, Senegal to Djibouti
and by road from Cairo to Cape Town; furthermore,
the objective is to uplift Africans from poverty;
to reassert ancient and medieval African
civilizations; and to encourage African lions to
roar in an effort to symbolize the reemergence of
Africa.
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