The African Continental Free Trade Area agreement presents African states with the opportunity to collectively grow their economies in an unprecedented manner. With the lack of steam in the implementation of the AfCFTA, how can Africa achieve the agreement’s potential for pan-African economic growth and development?
Editor’s note: This essay is available in our print issue, Pan-African Dreams. Buy the issue here.
In recent decades, pan-Africanism has assumed a different dimension. Its core point has evolved from the endeavour to stamp out Western hegemony and colonial subjugation, to the conscious undertaking to foster cooperation amongst African states and Africans for the advancement of the collective growth of the continent across different spheres of life. It is in furtherance of this undertaking that the African Continental Free Trade Area (AfCFTA) was birthed in 2018 under the aegis of the African Union (AU), to facilitate the economic integration of Africa.
The prospect of the AfCFTA easing economic mobility across the continent spurred many African states to sign the agreement. More so, in 2020, the World Bank projected that the AfCFTA has the potential of accruing a seven per cent gain of about $450 billion worth of income boost in Africa by the year 2035. In the same vein, the implementation of the trade agreement was expected to contribute to the elimination of poverty in several African states. Businesses and entrepreneurs across Africa basked in the possibility of extending their market reach with lower cost implications by leveraging, amongst other things, the single continental market of about 1.2 billion people and investments that the AfCFTA seeks to create. Further projections given by the United Nations Economic Commission for Africa in 2023 forecast that the trade agreement would boost intra-African trade by 40 per cent within the course of the first 20 years of its implementation.
Fast forward to 2023, the looming promises of the continental economic community that the AfCFTA presented are becoming evanescent due to the loss of momentum in the implementation of the agreement by a substantial number of states that were signatories to it. This situation contrasts with the efforts of the AU which is still trying to augment the AfCFTA implementation across the continent. This paradoxical situation has caused eyebrows to be raised as to the possibility of this productive policy translating from paper to fruition. Experts have attributed this lack of steam in the implementation process to several factors. Some opine that the delays in the implementation of the trade agreement is as a result of the prolonged process of its documentation and logistics-related challenges. Others argue that it is due to the economic uncertainties occasioned by the COVID-19 pandemic. A few more hold the opinion that the poor implementation thus far is a consequence of states putting on a protectionist disposition against economic vulnerabilities concomitant with cross-border business transactions.
These different positions as to why the momentum of the AfCFTA agreement implementation is waning questions the tenacity and commitment of African states and Africans to the pan-Africanist ideal of intra-African cooperation and conscious efforts for the continent’s collective growth. Just between this wavering vicissitude of contemporary pan-Africanism and the uncertainties surrounding the fruition of this aspect of its manifestation, it is worth asking: what really is the AfCFTA agreement, why has its implementation become stagnant and how can this impasse can be broken for the better?
THE AfCFTA AGREEMENT
The AfCFTA was borne out of the desire of African states to foster intra-African trade and blur certain trade barriers that have over the years inhibited the smooth flow of business transactions across different countries within Africa. In a bid to chart a new path for the African economy, the AfCFTA agreement came to being in March 2018, at a historic 10th Extraordinary Session of the African Union Summit held in Kigali, Rwanda. As part of the AU’s flagship project for Agenda 2063: The Africa We Want, a 50-year blueprint that aims to achieve a wide array of goals for inclusive and sustainable development and a visible manifestation of the pan-African ideals of unity, freedom, self-determination, progress and collective prosperity was created. Hence, the establishment of the AfCFTA was meant to create a solid foundation for the renaissance of pan-Africanism through economic policies that will override the negative vestiges of colonialism and facilitate the collective prosperity of Africa over time. As of July 2023, 46 states were parties to the agreement out of the 55 African states.
The agreement seeks to revolutionize the state of the African economy by making it easier for African states to amass economic growth by leveraging unprecedented measures that will ease and improve the state of international trade within the continent. The agreement created the largest free trade area in the world, which has the potential to connect over 1.2 billion people across 55 African states and eight regional economic communities (RECs) with a combined estimated Gross Domestic Product of about US$3.1 trillion. In order to ensure that the agreement has a lasting impact, the goals of the agreement were designed around certain general and specific objectives.
The first general objective is to create a liberalized African market for goods and services. The implementation of this objective will reduce the barriers to trade and occasion the establishment of policies that will bring about a significant attrition of the tariffs on goods. The continental market that this agreement offers will reshape market structures and economies across the region and ease the movement of capital and people, and also promote the development of investment initiatives across state parties and their respective RECs for the purpose of establishing a Continental Customs Union subsequently.
Significantly, the general objectives of the AfCFTA also include the enhancement of gender equality and structural transformation of states in Africa. Additionally, the agreement seeks to promote industrialization through diversification and regional value chains; to enhance food security and the development of agriculture; and to invariably hasten the continental integration of Africa.
On the flip side, the specific objectives of the AfCFTA comprise different immediate tasks that each party to the agreement is obliged to implement. These tasks include the progressive elimination of tariffs to trade in goods, liberalization of trade in goods, cooperation on investment, intellectual property rights and competition policy, cooperation in the facilitation of custom matters and the establishment of a framework for the settlement of disputes and the implementation process itself. The immediate implementation of these specific objectives is targeted to well up into the achievement of the general objectives in the long run. As at the beginning of 2023, the matters in the objectives of the AfCFTA agreement were still negotiated by parties.
In a bid to foster the implementation of the AfCFTA agreement’s objectives, the AU’ 2023 theme was ‘Acceleration of AfCFTA Implementation’. The reason behind this theme is to rally AU member states, to generate greater political commitment from African states and drive them to embrace the potentials that the implementation of the AfCFTA holds. Conversely, the praxis of this theme has been playing out differently, below the AU’s expectation, even before its official adoption.
WHERE THE EMBERS OF THE AfCFTA AGREEMENT STARTED DYING OUT
Years after the signing of the AfCFTA agreement by a substantial number of African states, the implementation of its terms has been riddled with challenges that differ from the expectations of the AU. This issue has incited a wide array of opinions that questions the commitment of the AU to the course and the disposition of Africans towards pan-Africanism in recent times. To account for the lack of steam in the implementation phase of the AfCFTA agreement, observers have identified several reasons as the inhibiting factors.
The implementation of the AfCFTA agreement is by necessity, a complex and highly collaborative undertaking, drawing on the expertise and experience of all African states. On this premise, it is argued that the involvement of multiple countries with diverse economies, different regulatory frameworks and a wide disparity in their level of development has posed a challenge to a smooth integration of the continent. According to experts, the phase of negotiations by countries will take several years because of the numerous policy frameworks that need to be put in place to facilitate a state’s implementation of the agreement.
In a similar manner, the existence of multiple sub-regional trade blocs and economic communities such as the Economic Community of West African States, Common Market for Eastern and Southern Africa, Southern African Development Community and East African Community, amongst others with their own trade agreements has made the negotiation process difficult. This is because coordinating and harmonizing these agreements with the AfCFTA is a complex endeavour that may result in overlapping regulations.
Another challenge is the fact that most African countries are still struggling to overcome non-tariff barriers such as corruption, infrastructural gaps and bureaucratic red tape. By implication, the manifestation of the objective of the AfCFTA agreement to facilitate the movement of goods and services across transnational routes has been impeded by factors including excessive regulations. In the same vein, inadequate infrastructure, such as poor transportation networks and border facilities, which are crucial to the implementation of a free trade zone, serve as a major drawback.
Furthermore, some experts have attributed the sluggard implementation of the AfCFTA agreement to the prevalence of political instability across the continent. This position considers the difficulty posed by security challenges in some African states and how the implications of such make it difficult for some of the objectives of the AfCFTA to manifest. As a result of this fact, the process of bringing some of the propositions of the AfCFTA has become more cumbersome than it should be, hence, the impasse.
At the tail of reasons for the lack of steam in the implementation of the AfCFTA agreement is the COVID-19 pandemic. According to a 2020 report by the United Nations, the African economy was set to grow at about 3.4 per cent in 2019 with a possible increment to 3.9 per cent by 2020. However, these projections were cut short by the COVID-19 pandemic. Considering the high dependency of the African economy on exports, the effects of the pandemic were adverse. This situation by extension reposed a heavy setback in the implementation process of the AfCFTA agreement, especially in the aspect of the trade negotiations with states. More so, governments were preoccupied with the management of the impact of the pandemic on their public health sectors and economies. The economic downturn of several African countries did not just affect the implementation of the AFCTA during the heat of the pandemic but also stretched into the aftermath of the pandemic.
IMPLICATIONS FOR PAN-AFRICANISM
The poor implementation of the AfCFTA agreement could have far-reaching implications on the concept of pan-Africanism, which seeks to promote unity, solidarity and cooperation among African countries. One of the central tenets of pan-Africanism is the belief in fostering a sense of common identity and purpose among African nations, transcending historical divisions and working together for the collective good. The AfCFTA represents a significant step towards realizing this vision by creating a single market for goods and services, facilitating intra-African trade and boosting economic integration on the continent. However, if the implementation of the trade agreement faces continuous challenges, it could undermine the confidence of African countries in the concept of regional integration and cooperation, casting doubts on the viability of achieving the shared goals of pan-Africanism.
Moreover, the success of the AfCFTA is closely tied to the credibility and effectiveness of the AU, which is the driving force behind the trade agreement. If implementation of the AfCFTA falters due to complex negotiations, non-tariff barriers, political instability, or lack of institutional capacity, it may lead to diminished trust in African institutions and a perception that regional initiatives are unable to deliver on their promises. This could not only hamper the progress of the AfCFTA but also impede the realization of other collective objectives pursued by the AU and its member states.
Furthermore, weak implementation of the AfCFTA may inadvertently reinforce nationalistic tendencies among some African countries. Instead of fostering a spirit of cooperation and compromise for the greater good of the continent, difficulties in implementing the trade agreement may encourage certain nations to focus more on their individual interests, potentially leading to frictions and strained diplomatic relations among African nations. This inward-looking approach could detract from the broader pan-African vision of solidarity and shared prosperity.
Additionally, the AfCFTA holds immense potential to boost economic growth, promote industrialization and create jobs in Africa. However, if the agreement is not effectively implemented, these economic opportunities may not be fully realized and the continent could miss out on the transformative benefits of a more integrated and prosperous African market.
STEPS TOWARDS PROGRESS
Overcoming the challenges that inhibit the speedy and proper implementation of the AfCFTA agreement requires coordinated approaches and conscious efforts from all member states of the AU, as well as other key stakeholders. Accelerating the implementation of the AfCFTA agreement requires a multi-faceted approach that involves prompt action, strategic focus and proactive engagement among all stakeholders. To overcome the slow progress experienced thus far, several key recommendations can be considered.
Firstly, the negotiation process should be expedited. Rather than waiting for all negotiations to conclude, the resolution of critical issues, such as rules of origin and tariff schedules should be prioritized. This can be achieved by adhering to an accelerated work programme, ensuring that the outstanding negotiations are finalized within the year.
Also, major traders across Africa should be empowered and actively included in the negotiation process. This measure involves the acknowledgement of the significant role played by large companies in intra-African trade. The establishment of representational groups, comprising governments and business associations, to address the challenges faced by these major traders will play a role in enhancing the implementation process. The collective influence can drive the full implementation of AfCFTA, much like how larger companies did during the creation of the European Single Market.
In another way, increasing the emphasis on the importance of promoting exports and facilitating imports to maximize the benefits of AfCFTA can also play a key role. This can be done by prioritizing the elimination of barriers to imports, as larger volumes of imported goods and services can drive welfare gains for African countries.
Furthermore, there is a need for more sensitization to be done across the continent about the merits of the agreement. This step involves the intensification of efforts to raise public awareness about the potential benefits and opportunities the AfCFTA presents. This creation of awareness can be done by using both social and traditional media platforms to disseminate information to various stakeholders, including chambers of commerce, private sector associations and the general public, on the potential benefits of implementing the AfCFTA and how these actors can play a role in accelerating the implementation process.
In addition, the implementation of simple operational steps will greatly augment the adoption of the AfCFTA agreement. This could involve encouraging the logistics and supply chain industry to utilize AfCFTA documents for their operations; making sure that companies comply with export registration under AfCFTA rules of origin and that they add the AfCFTA logo to customs documents used for regional trade within functional free trade areas of regional economic communities.
Additionally, the demonstration of success recorded thus far could go a long way in persuading more countries to jump on the implementation bandwagon. This will constructively imply leadership by example and demonstrate the positive impact of AfCFTA implementation. This will involve focusing on countries with contiguous borders, where tariff reductions could quickly facilitate enhanced trade. Going far in highlighting these successes during key events, such as the mid-year African Union Summit, will showcase the readiness to trade and attract further interest.
Similarly, countries that have successfully implemented necessary procedures for processing consignments under AfCFTA should be celebrated. The efforts of such countries should be used as case studies to inspire others to follow suit. Emphasis should be paid to the importance of value addition and diversification in intra-African trade as well as towards encouraging regulatory authorities to operationalize export and import procedures.
By collectively pursuing these recommendations, AfCFTA institutions, member states, private sector groups and other stakeholders can accelerate progress and unlock the full potential of the agreement. This collaborative effort towards regional integration will ultimately lead to a more prosperous and interconnected Africa.
The AfCFTA agreement presents African states with the opportunity to collectively grow their economies in an unprecedented manner. The creation of a continental free trade zone which this agreement offers will boost the mobility of goods and people, opening doors for businesses and people to trade efficiently. More so, the implementation of the AfCFTA agreement has a lot of significance beyond the threshold of economic integration. Implementing this agreement properly will manifest the ideals of contemporary pan-Africanism.
However, the visible lack of steam in the implementation of the AfCFTA has raised a lot of questions as to whether the agreement’s potential for growth can be achieved. Invariably, the possibility of a crumbling AfCFTA defeats the very essence of pan-Africanism itself. Hence, there is every need for states and other stakeholders to address the issues surrounding the AfCFTA’s implementation⎈
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