Building capacity to help Africa trade better

Africa must trade itself out of poverty


Africa must trade itself out of poverty

Africa must trade itself out of poverty
Photo credit: AU-UN IST | Stuart Price

Africa must grab this century... It’s ours for the taking

This century is Africa’s to own, or to lose. Economic transformation is occurring across the continent, from Mauritius to Ethiopia and Ghana, across East Africa, and for some, like Rwanda, the changes are coming breathtakingly fast.

New natural resources are being discovered. Investments in health and education have led to rising life expectancy, reductions in maternal and child mortality, and an increasingly educated young population.

In regions such as East Africa, massive investments in infrastructure – energy, roads, rail and IT – are being made, driving growth and providing employment.

Although the growth is still patchy, and there remain areas of political instability, insecurity and conflict, the continent has an agreed blueprint for dealing with her challenges and investing in her future – Agenda 2063.

Africa’s problems have been studied and analysed over and over. Plans and blueprints exist, in ministries across the continent, and for all the Regional Economic Communities. East Africa has Vision 2050, aiming to turn the region into an upper middle-income bloc by 2050.

The time for planning and analysis is over. Now is the time for execution. But to succeed, we need to move with dispatch, aware that we are in competition with the rest of the world, and that this competition will get tougher, not easier.

One of the critical game changers for Africa is the 26-member Free Trade Area between Comesa, EAC and SADC. The agreement, first mooted in 2008 in Kampala, and signed in 2015 at Sharm al Sheikh in Egypt, covers over half of Africa’s GDP (over $1 trillion) and will create a market of over 600 million people. Its pillars of market integration, infrastructure development and industrialisation provide a means of pulling millions of Africans out of poverty.

There is no shortcut to development. Africa’s businesses must become more competitive, and one way of ensuring this, in addition to reducing the many barriers that face them, is investment in a rules-based regional integration regime.

Africa must trade itself out of poverty. That is why it is critical to implement the Market Integration Pillar of the Tripartite Free Trade Area. Unless and until this is done, a continental free trade area will remain a mirage.

Important, but not insurmountable challenges to implementation remain. Tariff offers must be concluded, rules of origin agreed, and business persons must be allowed to move freely. It is unacceptable that some countries and regions would like to offer their African partners less than they have offered the rest of the world, or simply those tariff lines that are currently zero rated.

Rules of origin should not serve protectionist interests that frustrate intra-African trade. They should simply provide a framework to avoid to trade deflection. The focus should be on promoting cross national value chains that provide a basis for shared industrialisation.

The temptation to adopt SADC-type rules of origin, for example, should be resisted. These rules are protectionist, and have failed to advance the development of regional value chains.

Integration cannot simply be a question of politicking and sloganeering. It has to involve leadership determined to deal with beyond-border issues that make our economies uncompetitive, and our people balkanised.

Furthermore, Africans must be allowed to move freely across the continent. Movement of business persons creates wealth, and yet, it still is a nightmare for Africans to move and work on the continent. This is not a century that should be remembered for Africans desperately trying to flee their homes, losing their lives in the Sahara or the Mediterranean.

One of the challenges is for decision makers, at national and regional levels, to involve the people in the integration agenda. This is critical for a number of reasons.

First, the benefits of integration are mid- to long-term, while its challenges are immediate. Second, the mechanics of integration may be so technical as to produce parallel universes of technocrats and citizens, between whom dialogue and incomprehension reign. The Tripartite Free Trade Area project must go the extra mile, and promote dialogue beyond national leaders.

Africa has a choice. It can either become an agglomeration of Lilliputian economies basking in their sovereign poverty, open to manipulation and domination, or it can make the investments required for market integration, cross-border infrastructure development and shared industrialisation, and thus become a significant player in the emerging geopolitical order, whatever shape it may take. What it cannot do is to simply mark time, with its head hidden in the sand.

Dr Richard Sezibera is a Rwandan Senator and former secretary general of the East African Community.


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