The AU launched the African Continental Free Trade Area (AfCFTA) in March 2018 under the chairpersonship of Rwanda’s Paul Kagame, and endorsed it at its recent summit.
The accord — involving 1-billion people and a GDP of $2.2-trillion — focuses on the facilitation of trade; infrastructure; establishing a common market for goods, services and investment; and ensuring the free movement of people.
Intra-African trade is a paltry 14% of the total for the continent.
The area can be contrasted with the efforts of the late Nigerian scholar-administrator Adebayo Adedeji, Africa’s foremost prophet of regional integration, who led the creation of regional blocs in West, central, and East Africa. From the 1970s, Adedeji called for Africa to move away from orthodox prescriptions on the efficacy of international trade as an engine for economic growth, ideas on which AfCFTA is based. He opposed Africa’s continued exports of primary products while importing consumer goods.
Adedeji urged the continent instead to prioritise indigenous factor inputs, criticising its overreliance on export earnings and the lack of participation by Africa’s masses in the development process. For him, regional integration was a matter of national survival and socioeconomic transformation.
Adedeji’s 1980 Lagos Plan of Action identified as strategic sectors: food and agriculture; industry; natural resources; human resources; transport and communications; trade and finance; and energy.
The end goal would be an African Common Market, built around Africa’s subregional organisations as pillars and resulting in an African Economic Community by 2028.
Many challenges remain to implementing the Kagame-led continental free trade area. Outside West Africa, the free movement of people remains a pipedream as most governments are hostile to migration.
There is also a lack of convergence of African economies, many of which are competitive exporters of raw materials rather than complementary exchangers of diverse goods. Road, rail and port infrastructure across a continent with 16 landlocked countries remains poor. Rules of origin are often restrictive, while nontariff barriers such as sanitary standards and certification are widespread.
The AfCFTA also appears to have ignored some of the historical reasons for the failure of past regional integration efforts on the continent. Adedeji had famously noted that it is politics rather than economics that will ultimately determine the success of regional integration efforts in Africa. The original East African Community disappeared in the 1970s, without even being given a decent burial, due to ideological differences and a feeling that Kenya was deriving more benefits than Uganda and Tanzania.
Past AU efforts at raising levies from flights and hotel stays have also failed due to opposition from Africa’s small island states that depend heavily on tourism.
The fact that Africa’s largest economies — Nigeria and SA, accounting for a third of the continent’s economy — dragged their feet before agreeing to sign on to the African free trade area was troubling. Both local hegemons will be critical to driving any successful integration efforts in Africa. Plans for regional industrialisation and compensating poorer countries for losses from trade liberalisation will also have to be carefully worked out.
The vision for the operationalisation of such plans has been lacking, and SA, perhaps drawing from its experiences with the Southern African Customs Union, has reportedly opposed such compensation schemes.
However, Tshwane’s business lobby, active across much of postapartheid Africa, remains keen on the AfCFTA.
With its oil-dependent economy, Nigeria’s big business and trade union lobbies led opposition to the plan, fearing the dumping of foreign goods onto their markets.
There are contrasts between these two plans: while a strong-fisted autocrat, Kagame has led a top-down free trade area; the visionary technocrat Adedeji sought to lead a people-centred African Economic Community that was constrained by a lack of political leadership and thepersistent weaknesses of Africa’s subregional bodies.
Kagame’s AfCFTA also seems doomed to failure. This is a “big bang” approach to integration. Why would the same states that have consistently failed to pay their membership dues to regional bodies suddenly support an independent free trade secretariat?
If integration has not worked at national and subregional levels, would transferring all these problems to the continental level really integrate Africa? There has, after all, to be something to integrate for integration to succeed.
• Prof Adebajo is director of the Institute for Pan-African Thought and Conversation at the University of Johannesburg.
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