By: Yodit Tefera – The Reporter
African countries have taken their first step towards an economic integration. This has been marked by the signing of the African Continental Free Trade Area (AfCFTA)on July 7 2019 in Niger.
The concept of the continental free trade area goes back to the establishment of the African Union. The African hands that joined to fight colonialism came up with the idea to integrate the continent for a common cause. A cause that has taken over fifty years in the making to get to where it is today.
Million Habte is a Senior Expert on AfCFTA Support Unit with the African Union he explains that the stride to the AfCFTA began in 1980s Lagos plan of action which shows the plan of African architecture, where the economic integration plan was designed. Again in 1991 the Abuja treaty which is arguably one of the consequential plans was put in place. He continues to saying the plan depicts the end game of the agreement which is forming an African economic community.
The need for an economic integration has always been one of the top agendas in African issues. Many have stipulated as to what kind of unity should be formed and what kind of realism African countries should follow. Mekki Elmograbi is a political analyst who is based in Khartoum, Sudan in his article on Africa economy he indicated that African countries should liberalize their economic system for their integration to be successful.
He states, “Capitalism, as opposed to socialism, starts with economic liberty and limits the space for government intervention. In contrast, socialism starts with restrictions, limits, and burdens on both government and community, making economic freedoms and putting the right to property at risk. Although both systems deserve criticism, capitalism is more practical and realistic. Hybrid systems appear as a “third-way solution” but in reality, they are an illusion. They amount to socialism, traveling on a slower road.”
He further goes on by stating, “Africa needs to develop a practical and realistic development theory that creates markets, jobs, and skills. This new approach I call “African Regional Capitalism.”
Currently Africa has eight regional economic communities which serve as a building blocks for the African Continental Free Trade Area. The idea is to learn from the success and short comings of these regional communities to form a comprehensive free trade area.
Million states: “These communities are the ones that look at the document and discuss on it before it goes to AU. Continental task force is one of the stages we have to pass through. They are looking at the legal aspect for the countries to trade freely. The infrastructure, the capital, investment and human capital are also taken into consideration.”
While the idea behind the economic integration of the nations has been well received by many some are finding it hard to commit themselves. Nigeria was one of the founding fathers of the free trade area but now they have backed out due to pertaining questions from their country’s investors.
However, this will not refute countries from future membership. Mekki Elmograbi has quoted Prudence Sebahizi the Chief Technical Advisor on the Continental Free Trade Area (AfCFTA) at the African Union who said more countries will come and there is no need to re-open the discussions on the agreement because even those who didn’t sign or ratify it were part of negotiations. “Africa has big and powerful regional blocs, and there is a clear concept on how the RECs are the pillars and the building blocks of AfCFTA.”
Million said: “At this stage there are areas to be decided at a political level bringing 55 countries together is a contentious issue. African countries have one way or another have experience in trading with other countries and are members of trade and economic communities. The advanced ones will have an interest to take part in this agreement which will bring them a large market and a lesser competition. Nigeria is one county that is going to solve their national policies before they merge into the agreement seeing that they are one of the big economies of the continent. The not so developed nations have to step up their game and prepare themselves to some healthy competition.”
The integration of these African countries as indicated by the experts will have lots of ups and downs. Each country has to do their homework to contribute to the successful implementation of AfCFTA. They have to modify their commodity exchange strategies, industrialization, and tariffs to reach the intended goal.
Million says, “Once the African countries are ready to trade with each other they will have the CFTA which will give the right picture and guide them. It will not give solution to all the problems but it is the master plan that will facilitate the smooth trade. And other partners will also play their part at national level these African countries will also have their development plan. Which will have to comply with the CFTA plan.”
At the recently held AfCFTA 22 countries have come forth to sign the agreement which is the minimum number of members needed to set the plan in motion. The next step as indicated by Million is the implementation. He said the plan is laid out which will have a secretariat to facilitate the implementation. The Niger summit is just to announce to Africans and the world that Africa has entered a new era. There will be investment plan; how does one African country invest in another? Quality and copyrights have to be taken under consideration.
The plan has implementation phases, steps it would follow. The first phase is forming some regional economic communities. Having customs union and dealing with monetary issues to have one currency that binds them. AfCFTA is the first step. Time wise it has set 34 years which will end in 2028 to achieve the goals of African Economic Integration. “
Cheikh Tidiane of CACID said one of the biggest challenges for African economy is how can we make the private sector the key component to run production, processing and trade. Tidiane suggested a limited role for African governments in trade “the role of the state and the public sector is to create appropriate environment and context for the private sector to be developed and to take the opportunity inside the country or in the region.”
Million complies with Tidiane that it is up to the private sector to put the plan on the ground, “The politicians have done their homework it is up to the business people to go about their jobs. The plan is to have goods and services to go through all these African counties freely. 10 percent tariff is put as a lee way for African countries the ultimate goal is to have no tariff. If there are any challenges along the way, there will be dispute addressing mechanism. The whole plan is to unleash the potential that these African countries have. They will exploit their resources they will create jobs and ultimately better lives for Africans.
While Africans integrate the international partners, as stated by Million, will not be put aside, they will be by African side to provide technical and financial support. However, every country that deals with external countries have to make sure their agreements and dealings does not contradict with the AfCFTA guidelines.
The whole idea of this agreement is to avoid fragmentation and come to a unity. And the fundamental rules of unity that everyone has to comply with.
The question remains will the struggling countries keep up with the rise of Africa or be at risk of being swallowed by the giants of Africa?
Ed.’s Note: the views expressed in this article do not necessarily reflect the views of The Reporter. The writer can be reached at firstname.lastname@example.org.