The African Continental Free Trade Area: Reflections of an International Trade Law Student (Part I) by Prosper Batariwah

Introduction

The most significant development in International Trade in the 21st century is arguably the African Free Continental Trade Area (hereafter called AfCFTA). For the African region, the bringing into existence of an implementable form of this agreement and the gains and expectations the region anticipates to harvest from it can be likened to the establishment and contribution of the World Trade Organization in the early 1990s. The AfCFTA has been described in a variety of circles as a gamechanger not just for international and regional trade but also African Regional Economic Integration. Many regions have attempted integration in this form and have been successful. The European Union and the North American Free Trade Area (NAFTA, which Trump and friends have the intention of replacing) come readily to mind. The EU by far and large is the most successful when it comes to harnessing trade to promote regional integration. I propose therefore to inspect the AfCFTA against the backdrop of European Integration to tease out the lessons Africa can learn or should learn as it begins this ambitious attempt to consolidate a meaningful integration. In these series of articles, I begin by taking a critical look at the AfCFTA, to determine, as the judges would say, what ‘appears to me clear’ and what does ‘not appear to me clear’, I then turn to look at the model of European Economic Integration.  After this, I conclude with the lessons Africa can learn from the European Union.

 

The AfCFTA

In 2018, the agreement establishing the AfCFTA was adopted by the African Union at its 10th Extraordinary Session of the Assembly. The agreement was opened for signature on 21st March, 2018 in Kigali, Rwanda. The agreement entered into force on 30th May, 2019, thirty days after the 22nd instrument of ratification was deposited. When this agreement was being signed and ratified here and there, two countries in Africa decide to look on and then walked away. These were Nigeria and Eritrea. However, Nigeria repented, had a change of mind and resolved to be part of this ‘making of history’, leaving Eritrea alone.

According to the preamble of the Agreement, the AfCFTA wants to amongst other things, create a single market for goods and services, facilitate the free movement of persons in Africa to realize economic integration of Africa, the liberalization of the African market, create a customs union and help build up Regional Economic Organizations.

It is very important to add that this was not Africa’s first attempt at economic integration. In fact, the Abuja Treaty was very instrumental in laying the foundations for the AfCFTA. This agreement was reached in 1991 by the Organization of African Unity (OAU).  This Treaty established the African Economic Community. The treaty sought to promote the economic, social and cultural development of Africa, integrate, harmonize and coordinate the policies of African States and their economies and harness multilateralism. The strengthening of regional economic communities was very central to this treaty. This agreement was to be implemented in stages and the later stages envisaged a customs union and a common market for Africa.

Available statistics from the United Nations on trade in Africa indicates that the share of intraregional exports in total exports is lowest in Africa, compared with other regions, except Oceania. Intra-African exports were 16.6 per cent of total exports in 2017, compared with 68.1 per cent in Europe, 59.4 per cent in Asia, 55.0 per cent in America and 7.0 per cent in Oceania. There are eight regional economic communities in Africa, yet the share of intra-African trade remains low, at around 14.8 per cent in 2017.  However, it is believed that the operationalization of the AfCFTA would establish a market of 1.2 billion people with a combined GDP of US$ 2.5 trillion. AfCFTA is also expected to boost investment, increase the quality of goods through positive trade competition, promote agriculture, aid small businesses, encourage technology transfer, et cetera. There is potential in the AfCFTA indeed. But can Africa achieve holistic economic integration in a short period of time which has taken the least politically turbulent region, Europe, decades to achieve?