Ideas & Debate
Integration steps Africa requires for trade gloryWednesday February 21 2018
Heads of State from Africa will converge on Kigali on March 21 for an extra-ordinary summit, to sign a long-negotiated framework agreement establishing the African Continental Free Trade Area (CFTA).
Attached to the CFTA Agreement will be the protocols on trade in goods and services, and dispute settlement.
The protocol on trade in goods will have a number of annexes, covering rules of origin, non-tariff barriers, technical standards, health standards, customs, trade facilitation, transit trade, and trade remedies.
A few outstanding issues remain to be sorted out, and legal scrubbing has to be done: but there should be enough time up to March 21 to get all this done.
The CFTA will boost intra-Africa trade, creating jobs and incomes and improving welfare. Estimates back in 2014 were that the CFTA would double intra-Africa trade by the year 2022 over the 2014 baseline.
With a population of more than a billion people and a median age of 19.3, a combined GDP of $3.4 trillion, 60 per cent of the world’s arable land, consumer and business-to-business spending already at US$ 3.9 trillion and projected to reach US$ 5 trillion by 2025, highest returns on investment in the world, some of the largest deposits of strategic minerals, Africa is a growth pole of the global economy and a player in global peace and security.
The CFTA is a clear message to the whole world that Africa means business. At their recent ordinary summit on January 28, 2018, the African presidents launched the Single African Air Transport Market, with 23 countries participating, covering more than 70 per cent of air travel in Africa.
They concluded also a protocol to facilitate free movement of people in Africa. Together with the CFTA, these three flagships programmes represent quick progress under Africa’s long-term vision, Agenda 2063.
The agenda has 12 key programmes, which aim to transform Africa into a more integrated, peaceful and prosperous continent by the year 2063.
It should now be difficult to doubt that Africa is serious about economic integration.
Integrating 55 countries and disparate polities is the largest integration project in the history of humankind. It is no mean task. It will require continuous sharpening of technical, diplomatic, mobilisation and organisational skills.
The CFTA comes on the heels of yet another African milestone, that is, the COMESA-EAC-SADC Tripartite Free Trade Area, concluded on 10 June 2015 covering 27 countries.
It makes up half of the African continent; which has supported the negotiation and conclusion of the CFTA, through inspiration and motivation, experience and documentation.
About half of the CFTA negotiators had negotiated the Tripartite FTA, and brought with them text and insights.
A number of CFTA Annexes were drawn from the Tripartite instruments, and were concluded fairly quickly in the negotiations, especially those on non-tariff barriers, technical and health standards, customs, trade remedies, and dispute settlement.
What had been negotiated in the Tripartite was, however, in a number of cases, re-opened and modified. This was part of the experimental learning and subsequent improvement as would be expected when something is done a second-time round.
This was indeed in keeping with the long-term strategy for gradual African continental integration.
Under this strategy, RECs are the building blocs for the African Economic Community to be achieved by 2028 and provide valuable experience and lessons that are consolidated at the continental level.
The implications, though, could be that a lot of money and time can be wasted in negotiating regional and inter-REC instruments, while the continental process lags.
READ: African blocs fail to agree on Free Trade Area
Where the continental frameworks begin to take shape, inter-REC frameworks need not be commenced, as they are likely to be reopened and changed.
The challenge though is in the guessing involved about whether and when the African Union would actually develop effective instruments in given areas.
Practical application of regional integration reveals areas for creativity and innovation, which continuously results in new pathways at REC levels.
Realism would therefore suggest that REC policy formulation and programmes should continue full blast, for it is unlikely that continental frameworks would move as fast as those of smaller coherent RECs.
The CFTA long transition periods of 10 to 15 years and lower thresholds for market opening of around 90 per cent of total product lines, mean that the Tripartite and the RECs, which are more ambitious, have the responsibility of keeping the continental market integration agenda functional; for it will be long before the CFTA regime fully kicks in.
The new grand consolidation at the Tripartite and now the continental levels, however, means that RECs are coalescing and having a positive impact on continental integration.
Government, industry, academia and grass-roots and civil society organisations should equally own these programmes, through continuous education and mobilisation.
Francis Mangeni is Director, Trade & Customs, Comesa Secretariat.