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African Free Trade Challenges, Part Two
Posted on April 28, 2023 13:51
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As movement towards an African continent-wide free trade area continues some realities must be taken into account. While the long term benefits of such a development is not in dispute some international trends favor protectionism and nationalism. Vested interests may feel threatened and may oppose greater economic integration.
Following on to my column last week, and in response to some comments, I thought to take the discussion on an African Continental Free Trade Area a bit further. Firstly it would be clear to any observer that the economic advantages of such a free trade area are beyond dispute.
An Economic Advisor to the Economic Commission for Africa pointed out that a market of 1.3 billion people with a combined gross domestic product of US$3.4 trillion will be open to African products once the proposed Free Trade Area becomes a reality. Studies suggest a 9% increase in living standards by 2035, and poverty will become easier to eradicate.
Africa has a number of regional trade blocs, the so-called Regional Economic Commissions or RECs, with varying levels of economic integration. The Southern African Customs Union is probably the most integrated, with a degree of currency coordination. West Africa's Economic Community of West African States (ECOWAS) includes English- Portuguese and French-speaking states, and some degree of political cooperation is noted. ECOWAS has put pressure on a number of member states to respect democratic governance principles.
The European experience of gradual integration since the Reformation has not had much of an impact on Africa; in fact, one could argue that the carving up of Africa between colonial masters was a result of a coordinated European worldview. Yet Africa has historical precedents for peaceful co-existence between political units. Colonies of the same European power often had an easy exchange of people, goods, and services. Crossing the border between Kenya and Uganda back in colonial days, the formalities extended to a sign: "Please close the gate behind you."
Many modern African nations had difficulty balancing the needs of international participation with that of local sovereignty. President Mugabe of Zimbabwe was well known for his insistence on sovereignty even above his country's obligations to the United Nations Charter.
One of the problems for the proposed Free Trade Area is that of xenophobia. Many African nations distrust people of a different ethnic origins, and in South Africa, this has been a recurrent problem. The latest policy to return hundreds of thousands of Zimbabweans to their country of origin is not dissimilar to the stoking of ethnic distrust elsewhere in the continent. But freedom of trade, of services and goods also implies freedom of movement of people.
It is an unfortunate reality in Africa, and much of the rest of the world, that money influences politics. Businessmen who stand to lose to regional trade will oppose, with their wallets, the opening of borders to trade. Those who will benefit from future opportunities do not yet have the money to do so. At the same time, Customs officers, border control officials, local authorities who benefit from control of routes to border posts, and 'coupeurs de route' would all oppose easier communication.
Protectionism, and nationalism is understandable, but freedom will be in the interests of Africa.
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