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Why Africa trade deal will be a game changer

African heads of states and governments during the African Union Summit for the agreement to establish the Continental Free Trade Area in Kigali, Rwanda, on March 21, 2018. AFP PHOTO
African heads of states and governments during the African Union Summit for the agreement to establish the Continental Free Trade Area in Kigali, Rwanda, on March 21, 2018. AFP PHOTO 

This past week very positive news reverberated throughout the African continent from Kigali, the capital city of Rwanda.

The news was the signing by 44 African States of the signing of the Continental Free Trade Area (CFTA). That action is monumental for it fulfils a dream that the founding fathers of Africa had for Africa.

One of the founding fathers was Kwame Nkurumah, the first President of Ghana, famous for the quote, “Seek ye first the political Kingdom and all else shall be added unto you.” Nkurumah was also a strong advocate for African Unity, arguing that such a unity, “would have an overall economic planning on a continental basis which would increase the industrial and economic power of Africa.”

Nkurumah’s attempt at this project was not successful. Instead the founding fathers opted to establish the Organisation of African Union which shied away from robust and ambitious plans for the continent.

In 1980, The Lagos Plan of Action was developed to provide a pathway to Africa’s economic development. The Plan urged Africa to move away from overreliance on raw materials as the biggest export and instead focus on industrialization amongst other initiatives. In addition, it called for greater continental integration.

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Since its adoption, Africa has pursued an integration agenda. The integration has been through regional integration blocs, seen as building blocks to continental integration.

However, the regional blocs have not been able to fully deliver the dividends required to accelerate Africa’s economic integration and development, partly due to economies of scale and also continued challenges of sovereignty and its accompanied non-tariff trade barriers.

This is the background against which work over the last several years has been going on to establish the CFTA pursuance to a resolution by the African Union Member States in 2012.The discussions, though have been on for long and trace their roots from the Lagos Plan of Action. The CFTA is expected to act as a key driver for economic growth, industrialisation and sustainable development within the continent.

The huge numbers of countries that signed the CFTA is historic and signals a determination to enhance unity within the continent and confront the barriers that have continued to stand on the path of the continent’s accelerated development. It is also a recognition that continued reliance on the doctrine of sovereignty in its traditional sense is inimical to dealing with the challenges that confront Africa’s peoples.

However, the game changer will be the commitment with which the agreement is implemented across the continent. A study of regional integration efforts within Africa reveals that despite public statements, there are still many barriers that countries place on the path of increased trade with their neighbours.

The East African Community is the most advanced in terms of economic integration in the region. However, businesses still suffer hurdles placed on their path as they trade within the community. In addition, the Partner States occasionally view each other with suspicion and take action which negate both the spirit and commitment under the EAC integration agenda.

The continent is a player in global and other trade initiatives. The economic partnership agreements under the Cotonou Partnership Agreement with the European Union and the Africa Growth and Opportunity Act (Agoa) initiative with the US are two such examples.

Despite their existence, Africa has not truly benefited from the engagements. A strong continental trade integration agenda will help galvanize Africa’s efforts and place in global trade.

All the countries in the continent have to follow the signing process with domestication efforts. Political commitment must move beyond signature to aligning domestic policies so as to actualise the commitments under the CFTA. In addition, the continent has to prioritize resource allocations for the initiatives under the CFTA.

The demonstration of success must go beyond lofty reports and statements. It must have tangible impact on the lives of citizens of the continent.

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