African Continental Free Trade Agreement: Turning a dream into reality
By: Dr. Esther N. D. Darku
“Progress is always driven by something that transcends everyday life … and sometimes the dreams natured by generations come true,” Herman Van Rompuy
The African Continental Free Trade Agreement (AfCFTA) has been hailed as a turning point in African integration. In line with the African Union’s (AU) core mission of a better integrated Africa, AfCFTA seeks to establish a continental market aided by the free movement of persons, capital, goods and services, with the hope of entrenching economic integration, and promoting agricultural development, food security, industrialisation and structural economic transformation. At the launch of AfCFTA, Cyril Ramaphosa, President of South Africa echoed these sentiments when he said:
“the coming into effect of the African Continental Free Trade Agreement basically means that Africa is fulfilling the dreams that was crafted by the founding fathers of the OAU more than 60 years ago when they conceptualised the formation of an integrated Africa … that is united and is going to work as an economic block.”
This agreement is a bold step towards this dream and inspires hope of a vibrant era of intra-African trade. A report by the United Nations Conference on Trade and Development (UNCTAD) estimated that the AfCFTA this could boost trading on the continent by 33% as it offers access to a potential market of 1.2 billion people with a combined GDP of about 3.2 trillion. One of the remarkable things about the proposed AfCFTA is its sensitivity to the specificities of national-level developmental conditions. Considering the fact that countries are experiencing different degrees of industrial and general economic development, the agreement promises “mutually advantageous rules” that will govern trade among African countries. The agreement can be a game changer in global trade and can possibly redefine African trade with the rest of world.
However, concerns remain about how the agreement would be implemented, and its potential impact. The International Monetary Fund (IMF) has sounded a cautionary note, expressing concern over the possibility of uneven effects and potential revenue loses in countries that employ high export tariffs . Furthermore, like many other regional initiatives on the continent, there is scepticism over the potential of AfCFTA to really take off and be sustained. Nigeria, for instance, dragged its feet before finally signing on to the agreement, expressing concerns over porous borders and the potential of dumping on its market.
In addition, movement of people across the continent continue to be hampered by infrastructural and institutional bottlenecks. Recent outbreaks of xenophobic attacks in South Africa, and reports of harassment of African migrants in countries such as Kenya and Ghana can undermine attempts to create a continent-wide market. Although the current move towards a continental visa-free entry in many African countries is laudable, the more important issues concerning longer stay visas – needed for business – are matters needing attention.
Amidst the uncertainty of what can be called an ambitious move by the AU, questions and speculations on how AfCFTA can really make a difference in creating opportunities for member countries remain to be answered. What would make AfCFTA work? I focus on three areas.
First, there is a need for strong believers in the project who are willing and are able to safeguard its implementation. These believers must critically consider how seriously this initiative is taken by the other African countries. A lesson would be learnt from the experience of the European Union (EU) in the 1950s, where believers in the common market pushed it as one of the building blocks to achieving peace and stability. The six core European countries (Belgium, France, Germany, Italy, Luxembourg and the Netherlands) that signed the EU agreement had a strong belief in the idea of integration as a measure for preventing further wars on the continent, and were influential in giving the idea wide currency across the continent.
Secondly, the role of national and regional-level policy entrepreneurs in pushing the agenda is key to the success of AfCTA. The initiative is likely to enjoy greater acceptance if it resonates with and empowers local actors who are then able to mobilise domestic support for it or to take up advocacy with governments. The successful framing of the idea by policy entrepreneurs in a manner which communicates benefits as attractive and potential value for African countries can immensely aid the translation of AfCTA into a transformational agenda.
Last but not the least, the importance of institutions cannot be overemphasized. While it is also laudable that new continental institutions are emerging as a results of this new trade agreement, it is important that national and regional institutions properly align themselves with the aspirations of the continental institutions of regulation. A continental institution will be powerless without effective counterpart national institutions. The power of ideas is determined by the material and institutional dynamics, and for the idea of continental free trade agreement to be successful, there should be a seamless institutional setup between national and continental levels. To establish a market that is “transparent, predictable and mutually-advantageous” requires both commitment and institutional support from key players.
The idea of an integrated market is perhaps the catalyst the AU needs to facilitate integration on the continent. However, the power of this idea can greatly enhanced when it is able to mobilise strong national level supporters, when it succeeds in achieving synchrony between national level and continental institutions, and when institutional and social barriers to free movements of persons are removed. An integrated African market can help create value for a continent that has previously been disadvantaged in global trade.
Dr. Esther N. D. Darku is a CDD-Ghana D&D Fellow in International Trade and Domestic Market Competition. She holds a Ph.D. in Sociology from the University of Fort Hare, South Africa and an MA in African Studies from the University of Ghana. A CODESRIA-African Pathways Scholar, she works as a part-time research advisor at the School of Graduate Studies, Ghana Institute of Journalism (GIJ).