AFRICA CAN ACHIEVE CONTINENTAL FREE TRADE IF…

Arguably, one of the most difficult tasks that can be bestowed on one is to negotiate with various parties.

This task becomes more burdensome when it involves different people, institutions, organisations and nations that have so much complexity. Over the past few months, many Africans waited patiently while supporting the candidacy of the former Nigerian Minister of Finance, Ngozi Okonjo-Iweala, now the first woman and first African to lead the World Trade Organisation (WTO). Her appointment is set to remove a key obstacle to the functioning of the WTO, which has been leaderless during a time of growing protectionism and global economic stress caused by the pandemic. The first time I met her, I was somewhat star-struck because she resonates with so many Nigerians, thanks to the rigorous financial reforms she implemented under then President Olusegun Obasanjo. She was the first to force all states to publish their allocations from the federal government, which helped dramatically increase transparency. I am not certain if this policy is still active, but her many positive reforms led her to become lovingly known as ‘Mama Action’.

Launch

The launch of the Africa Free Continental Free Trade Area (AfCFTA), which is led by South Africa’s Wamkele Mene commencing on January 1, is set to be one of the largest trade deals in the world, in terms of reach and possibly Dollar value. AfCFTA is made up of 54 African countries merging into a single market of 1.3 billion people and aims to enhance sustainable markets. This could create an economic bloc with a combined gross domestic product of US$3.4 trillion (about R49.93 trillion) and could see intra-African trade grow by 33 per cent – and cut Africa’s total trade deficit in half. It’s also expected to generate combined consumer and business spending of US$6.7 trillion by 2030. It’s undoubtedly a powerful vehicle for economic transformation and will facilitate the movement of people and labour, competition, investment and intellectual property.

Agreement

As it stands, most African countries have ratified the agreement, with around 18 yet to do so. Currently, the three regional blocs (southern African Development Community, Common Market for eastern and southern Africa and the east African Community) are accelerating the process of regional integration – and also developing mechanisms to ensure safe movements in the region, particularly with the pandemic in mind. Over the years, Africa has been fragmented in terms of continental cooperation and ensuring that trade alliance is realised and our capacity to industrialise is boosted. I recall that during my last year in high school, our class was engaging with the teacher when one of the pupils started bragging that his family imports toothpicks. 

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