The African Continental Free Trade Area (AfCFTA) was ambitiously launched with the goal of transforming trade across Africa, creating what would be the world’s largest free-trade zone by connecting 1.3 billion people and aiming for an additional $450 billion in revenue by 2035. However, five years after its signing in 2019, questions arise about its implementation and overall impact.
The Promise of AfCFTA
The AfCFTA was designed to dismantle trade barriers, reduce tariffs on 90% of goods by 2034, and foster a single market for goods and services across 55 African countries. It was seen as a pivotal step towards economic integration, promising to elevate intra-African trade, stimulate industrial growth, and enhance economic competitiveness. Early transactions under this framework, such as exports from Ghana and South Africa in 2023, indicated a move towards this vision, yet these remain marginal in the broader context of African trade.
Current State of Implementation
Despite the enthusiasm at its inception, the AfCFTA’s journey has been marked by slow progress. Only 46 of the 55 African Union member states have ratified the agreement, highlighting a significant lag in national commitment. The removal of tariffs, central to the agreement’s efficacy, has not been uniformly implemented. Moreover, logistical, structural, and political challenges continue to impede the growth of intra-African trade.
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Challenges and Criticisms
Critics point to several issues that have militated against the effectiveness of the agreement. These include:
- Slow Ratification: The pace at which countries have ratified the agreement has been criticized. The absence of full participation dilutes the potential benefits of a unified market.
- Infrastructure Deficits: Africa’s trade landscape is severely hampered by inadequate infrastructure. The dependency on foreign shipping lines, with 98% of maritime shipping owned externally, exemplifies this challenge. A notable example includes a shipment from Kenya to Ghana that had to transit through Singapore and Dubai, illustrating inefficiencies in regional connectivity.
- Trade Strategy Conflicts: Some countries continue to prioritize bilateral trade agreements with external partners, potentially undermining the AfCFTA’s objectives. The agreement stipulates that member states should not sign additional free trade agreements with third parties before fully implementing the AfCFTA, yet this practice persists.
- Economic Disparities: The fear of market flooding in less industrially advanced countries adds to the reluctance to fully embrace tariff reductions. This concern is particularly acute in sectors like agriculture, where many African nations struggle with self-sufficiency.
- Political Will: The commitment to regional economic blocs before opening markets further to external players is seen as lacking, impacting the agreement’s effectiveness.
Economic Impact and Analysis
While the AfCFTA has the potential to significantly boost intra-African trade, current figures are sobering. Intra-African trade constitutes just 16% of the continent’s total trade, a stark contrast to intra-regional trade percentages in Europe and Asia. This low figure underscores the need for more aggressive policy implementation and trade facilitation measures.
Economic analysts like Africa Kiiza have highlighted that the assumption of automatic trade increase post-liberalization is flawed, given Africa’s unique economic landscape. The AfCFTA’s success is contingent on addressing these foundational issues, including infrastructure development and harmonized trade policies.
Future Prospects
The AfCFTA remains an ambitious project with the potential to fundamentally alter Africa’s economic landscape. However, its success hinges on:
- Enhanced Infrastructure: Major investments in transport and logistics are crucial. The construction of bridges like the Yagoua-Bongor bridge between Cameroon and Chad shows steps in the right direction, but more systemic changes are required.
- Policy Alignment: African countries need to align their trade policies more cohesively to avoid the pitfalls of fragmented trade agreements.
- Political and Economic Commitment: There needs to be a robust commitment from all member states to not only ratify but also actively implement and support the agreement’s principles.
- Capacity Building: Strengthening local industries to compete in a larger market without being overwhelmed by imports is vital for sustainable growth.
While the AfCFTA has not yet failed, its potential is significantly under-realized. The agreement’s future will depend on a collective effort to overcome its current hurdles, with a focus on creating real economic benefits for Africans through increased trade, investment, and industrial growth.
For many, the vision of a unified African market remains the goal, but the path to realizing it requires unwavering dedication to the principles of economic integration. This can only be driven by an African leadership that is truly committed to the growth of Africa and Africans rather than those beholding to Western masters who hold them in chains via various AIDS with hooks imbedded in them.
Africa will only be built by Africans