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An African Market – Slow Progress

Coen Van Wyk

Posted on February 17, 2020 12:02

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A united Africa has been an ideal of liberators like Kwame Nkruma, but for decades Africa had remained divided between ex-colonial economic spheres. Most of African exports are directed towards erstwhile colonial masters. But this may change as a continental trade agreement takes shape.

Central to the drive for independence in Africa was the concept of Pan-Africanism – a political movement going back to the 19th century to create a network of solidarity against oppression. Once the end of colonialism had become inevitable, leaders like Kwame Nkrumah organised an All-African People’s Conference to espouse a common African Nationalist Identity. Several similar initiatives did not serve to eradicate the colonial segmentation of Africa; however, with the various language blocs competing with each other, and exporting the mass of their products out of Africa, mostly towards the erstwhile colonial powers.

Cape Town, gateway to Africa. https://africaports.co.za

A number of Regional Economical Communities developed in Africa, such as the Economic Community of West African States (ECOWAS) and the Common Market for Eastern and Southern Africa (COMESA). Services such as vehicle insurance, harmonised import- and export regulations, and similar were developed, but in 1981 the Abuja Treaty was signed to create a continent-wide economic and monetary union. Slow but steady progress led to the creation in March 2018 of the African Continental Free Trade Area (AfCFTA) in Kigali, Rwanda. A year later forty-nine Member States of the African Union had signed the Agreement, twenty-two Parliaments had ratified it, and an Intra-African Trade Fair in Cairo, Egypt had attracted 1086 exhibitors.

http://thelatest.com/uploads/tlt/9fa6c60c38764dd74ac2d405984e7d05.jpg
Agro-business exhibitors. ATA.gov.et

Nigeria had held out, concerned that a free African market might be against the interests of its manufacturers and entrepreneurs, but in June of 2019 Nigeria became a signatory. It is hoped that members will lower, and eventually eliminate, customs tariffs between them, allowing fish from the Seychelles, oil from Angola and Nigeria, and services from Ghana to access other African markets. At present, only 16% of African trade takes place inside the continent, and the target is to achieve a 60% boost by 2022. Beneficiating African products before exporting is also on the cards. Greater industrialization of products will add to economies and create sorely needed jobs.

Trucks waiting to cross from Kenya to Uganda. NMG/businessdailyAfrica.com


Concerns remain that the Free Market initiative might lead to "screwdriver operations" where foreign products might flood African markets after, say, a few buttons are added to foreign-produced shirts. Trade Ministers will have to negotiate a consensus on rules of origin and tariff concessions before a Summit, scheduled for May 30th - a tight deadline.

Mombasa, Kenya. www.africashippinglogistics.com

Jakkie Cilliers, well-known expert on African futures, believes that the Agreement will increase intra-African manufacturing exports and will boost industrialization. Agro-processing is seen as a starting point.

While the rest of the world seems to be fragmenting economic groupings, Africa believes it would protect local business and spark an African economic renaissance. The road towards greater integration and better intra-African trade is long and difficult. Leaders remain jealous of their own sovereignties, but the weight of African peoples to trade freely cannot be denied for long.

Coen Van Wyk

Posted on February 17, 2020 12:02

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Source: Al Jazeera

Implementation of the ECO was delayed several times, but recent agreement on African free trade area is seen as enough incentive...

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