Africa free trade: Ambitious but achievablePosted on Tuesday, July 10th, 2012 by Bathembu, Chris (SAnews.gov.za, Addis Ababa) in News
African countries should not underestimate the task of ensuring that the ambitious idea of an African Union Free Trade Area (FTA) gets off the ground, AU Commission Director of Trade and Industry Treasure Maphanga said on Monday.
Speaking at the Permanent Representatives Committee (PRC) meeting, which got underway in Ethiopia today – ahead of the 19th African Union Summit – Maphanga told reporters that getting African countries to trade amongst each other was a huge task, one that needed commitment from all parties.
The theme for the upcoming summit is “Boosting intra-Africa trade” and the heads of state that will arrive later this week are expected to thrash out ideas that would lead to a more valued continent.
“We are moving from the premise that this is ambitious, but it’s feasible… This is a project that belongs to the continent and we (the AU) are agents and facilitator, and our role at the end of the day is to assist in monitoring it to ensure its success,” said Maphanga.
Leaders have, at an AU Summit earlier this year, endorsed the plan expected to be operational by the end of 2017. It envisages a Gross Domestic Product of US$875 billion from 26 countries. The East African Community (EAC), Common Market for Eastern and Central Africa (COMESA) and Southern African Development Community (SADC) have already begun negotiations to merge, which is a precursor to a single trade area across the continent.
According to the AU, the three regional economic blocs constitute 58% of the continent’s GDP and 57 percent of its population. South Africa has thrown its weight behind the plan, with President Jacob Zuma suggesting that it could go a long way in addressing poverty and underdevelopment.
“We expect that we will have the opportunity to consolidate the architecture that was adopted at the last summit and that architecture was very clear in terms of the continental frameworks and the structure that will support the FTA agenda,” Maphanga said.
Africa had realised that without trade and investment and speeding-up economic self-reliance, there would be no progress on integration, she added.
Critics of the plan have argued, however, that Africa was wrongly integrated into global trade, citing cheap labour and raw materials. There was also doubt on the level of political commitment among the continent’s leaders to push the plan to the latter.
But Maphanga insisted that member states would be the key drivers of the project and that “there is no need to think too much about what others are saying”.
“We have realised that we need a transformation of the patterns on trade. Without industrialisation and the value addition, we will not make any difference at all in terms of future trade patterns.”
The Africa trade committee, which consists of heads of state, would need to keep the FTA project alive with regular reports to the assembly on the progress and this should go beyond the current summit.
She pointed to the progress that she said had been made by East and Southern Africa, singling out Kenya as enjoying the highest level of intra-Africa trade.
A study has shown that Kenya had, over a five-year period from 2006 to 2010, exported horticultural products valued at Ksh30.5 billion – six times the value of imports (Ksh4.8 billion).
The exports increased at an annual rate of 14.3% from Ksh3.9 billion in 2006 to Ksh6.8 billion in 2010, while imports increased at a rate of 26.2% from Ksh0.6 billion in 2006 to Ksh1.4 billion in 2010.
The main market destinations for Kenya exports by value were Somalia (63%), Uganda (10%), Tanzania (8%) and South Africa (5%).
“So we see that there are examples and this is something that countries can look at,” said Maphanga.