The African Continental Free Trade Area: Balancing The Contending Interests Of 55 States
By Joburg Post
The AfCFTA will mark a new path for African states to reduce their exposure to unpredictable global market forces.
However, can African states balance their contending the contending national interests of 55 states?
Intra-REC common trade polices may help Africa redefine its relationship with the rest of the world by developing a common trade policy that will guide how it negotiates trade deals with the rest of the world.
Delegates attending the 38th meeting of the Committee of Experts of the ECA Conference of African Ministers of Finance, Planning and Economic Development have applauded the Federal Republic of Ethiopia for having just ratified the instruments instituting the African Continental Free Trade Area (AfCFTA), in a plenary debate in which the AfCFTA was given prime focus.
News that Ethiopia's House of People's Representative had become the 21st legislative body to ratify the agreement on the AfCFTA on the 1st anniversary of the signing of the agreement by many African countries in Kigali - Rwanda (this occurred on 21 March 2018), met the experts in a very charged review of the performance of ECA for the period running from April 2018 to March 2019.
The move by Ethiopia and Rwanda indicates that the AfCFTA is gaining traction in Africa as more countries move to ratify the trade deal. The AfCFTA comes at a time when global demand has become sluggish and players like the USA have criticized globalisation and have chosen to look inwards. African states have long called for greater intra-Africa trade, but this has until now been a pipe dream.
Various current and former African Heads of State
What remains to be seen is how will a continent where most African countries trade in raw materials, build relationships based on specialization, which is a key determinant in establishing mutually beneficial trade relations according to the liberal school of thought?
Moreover, given that Africa’s economic structure was built to service and trade with the rest of the world and not with itself, how will leaders fund projects that seek to make it easier to trade and move goods and people around the continent?
There is no doubt that Africa can be a self-sustaining market, given its market size, youth population and the expected growth of its population and the middle class.
However, African states will have to answer the complex question around balancing the interests of more powerful states such as South Africa and Nigeria, with those of smaller countries like Lesotho and Seychelles.
The danger is that larger economies may, in the end, be the biggest winners, with little in the benefit for small countries. Moreover, Africa must determine whether it will uniformly change its negotiation stance with the rest of the world in order to avoid the exploitation and bully tactics by advanced economies. By pooling its bargaining power in the likeness of the EU, Africa can redefine its relationship with the world and do away with days of being dictated too.
Yes, I know what you asking, how does Africa do that?
One way is to synchronize Regional Economic Communities (RECs), firstly by reducing the number of existing ones (There more than eight). There just too many RECs and this is causing trade policy confusion. If African states could pool their expertise within the regions and use intra-REC trade rules as a building block towards one common negotiation policy, this could help bring about uniformity in how we deal with the rest of the world.
AU institutions such as the African Union Commission, the Pan African Parliament and RECs all have a role in not only promoting the quicker implementation of the AfCFTA but also developing a common trade policy with the rest of the world. It will be seen if African leaders have the resolve to place Africa’s needs above narrow political interests. Only time will tell but for now, we must remain ever so hopeful that Africa’s best days are ahead!
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