By Keechi Deca
It is okay to complain about the likely impacts of the ongoing global trade wars of tariff and counter tarrif, but it is not okay not to see opportunities therein.
I belong to the school of thought that acknowledge the fact that the global systems are skewed against Africa, but that Africa has made no practical committed efforts to escape from the grips of the systems.
While we lament about unfavourable trade practices against Africa, we shouldn’t lose sight of the numerous restricting trade practices Africa imposed against itself.
The African Continental Free Trade Area Agreement (AfCFTA) commits countries to remove tariffs on 90 % of goods, progressively liberalize trade in services, and address a host of other non-tariff barrier. If there’s a better time to fast forward this agreement, now is that time.
This is because if successfully implemented, AfCTA will create a single African market of over a billion consumers with a total GDP of over $3 trillion. This will make Africa the largest free trade area in the world.
Why then are we footdragging especially as the rest of the world embarks on a journey of ultra-protectionism that is the next stage of the trade wars unless something gives.
If we achieve only the removal of tariffs on goods, it would increase the value of intra-African trade by between 15 % (or $50 billion) and 25 percent (or $70 billion), depending on liberalization efforts, in 2040, compared to a situation with no AfCFTA in place.
Also, the AfCFTA is expected to drive the Protocol on Free Movement of Persons, Right to Residence and Right to Establishment, and the Single African Air Transport Market (SAATM).
How are we going to achieve the free movement of persons when only four out of 54 African countries offer visa-free entry to all other African citizens: Benin, The Gambia, Rwanda, and the Seychelles. While some other countries offer visa-free entry for a select number of African nations, these four are the only ones that have fully abolished visa requirements for all African passport holders.
And how do we expect to people to move across the continent when the Yamoussoukro Decision, a treaty adopted by most African leadership to liberalize air transport services and signed by 44 African states in 1999 becoming binding in 2002, is yet to take off in 2025. That’s why it costs almost same fare to fly from Lagos to Freetown, a trip of three hours, and Lagos to Washington DC a trip of 12 hours.
The share of intra-African exports as a percentage of total African exports is still less than 19 percent which is low compared to levels in Europe (69 percent), Asia (59 percent), and North America (31 percent).
If we achieve only the removal of tariffs on goods, it would increase the value of intra-African trade by between 15 % (or $50 billion) and 25 percent (or $70 billion), depending on liberalization efforts, in 2040, compared to a situation with no AfCFTA in place.
Alternatively, the share of intra-African trade would increase by nearly 40% to over 50% depending on the ambition of the liberalization, between the start of the implementation of the reform (2020) and 2040.
Africa has huge potential and the present global madness offers us great opportunity to look inwards and develop a key growth buffer. But are we ready, and willing?
About Author:
Kelechi Deca, a Development Journalist is Editor-in-chief of The African Economy Magazine.
