On a recent overland journey across East and Southern Africa, I was struck by just how busy African borders are. The potential of increasing trade and improving lives is immense. I was able to enter seven of the eight countries I visited without requiring a prior visa. One of the biggest learnings during this trip was that the viability and benefits of regional integration – both as an ideology and as a tool for promoting trade, development and movement of capital and resources – are increasingly being challenged by the current world order.
From Brexit to the rise of ‘Make America Great Again’, and from opportunistic Russian interventionism to China’s increasingly assertive nationalism, political forces appear to be pushing away from the liberal vision of free trade and regional integration.
The AfCFTA promise
Even as parts of the world (including certain African countries) head down the path of nationalism and protectionism, others are bullishly pursuing bilateral trade and investment agreements aimed at opening markets and lowering import duties. The first step towards the realisation of trading within a borderless USD 3.4 trillion market under the African Continental Free Trade Area (AfCFTA) is to begin in June 2020. In the long-term, the African Development Bank estimates that AfCFTA has the potential to increase the value of intra-African trade by 25% and boost total economic output by USD 29 trillion by 2050. When fully implemented, AfCFTA is set to create the largest free trade area since the establishment of the World Trade Organisation.
For the first time in a long time, Africa has chosen a different path from the rest of the world, which appears to be narrowing its trade horizons on several fronts. With this new order, people, capital and goods are expected to move more, creating new entrepreneurial opportunities, unlocking jobs and additional growth capital. Attention now turns to African leaders. Will they find the political will and courage to implement AfCFTA at a time when agendas are topped by mediocre economic performance, unsustainable debt and the urge to remain in power? Increasingly, discussions around regional integration within Africa will unfold in the digital space – in real-time and in 280 characters – providing some counterbalance to more traditional avenues for asserting leadership. Yet whichever platform Africa’s leaders choose to engage on, it seems likely that the promises of AfCFTA will take years rather than months to draw results of scale, with the continent also susceptible to the same narrow agendas that are pervading other parts of the globe at this time being.
As it stands, only 15% of exports from African countries are to other parts of the continent, while the equivalent figures for North America and Europe are 58% and 67% respectively. The logistical and political challenges are many. But while regional integration is usually talked about in the context of exchange of goods, capital and information between countries, the real driving force behind it are the people. And African people are on the move. Young Africans – expected to constitute 42% of the continent’s population by 2030 – are curious, ambitious and keen to learn and exchange ideas.
AfCFTA’s implementation in June 2020 will not go as scripted, but its transformational potential might also be unscripted. A stubborn immigration officer at one border post aside, the rest of my travel was smooth. Experiencing this level of free movement across the continent, I could not help but be slightly envious of future generations, despite the multiple challenges compounding our political and environmental situation.
By Martin Macharia | Consultant | Africa Practice