During the 50th Anniversary Solemn Declaration at the African Union (AU) in May 2013, leaders of African countries made a commitment to foster and accelerate the continent’s development and technological progress. About two years later, on the 31st of January 2015, Agenda 2063 was adopted by Heads of State and Government of the AU. Agenda 2063, dubbed “The Africa We Want” is a blueprint and a strategic framework that aims to deliver on its goals for inclusive and sustainable development.
Based on the goals and aspirations of Agenda 2063, immense growth in the economies of individual countries, reduced poverty, gender equality, unity among countries, increased and seamless trade among nations, improved manufacturing and investment by and for Africans, to mention just a few, are anticipated by 2063. The essence of this Agenda is for African countries to introspect and devise innovative ways to be self-sufficient and become important players in the international community. As lofty as all these may sound, the adoption of the Agenda was an important step for Africa in the journey of self-reliance.
One of the flagship projects of Agenda 2063 is the establishment of the African Continental Free Trade Area, which is outlined in the African Continental Free Trade Agreement (AfCFTA). The intention of the AfCFTA is to boost Africa’s trading position in the global market, thereby accelerating the growth of Intra-African trade.
The AfCFTA essentially creates a single market for goods and services where countries within Africa can trade with one another, hassle-free and with minimal or no protectionism. This implies that trade barriers like tariffs, would be absent or quite insignificant. This creates opportunities for companies to access new markets which consequently boosts the economies of member countries.
Nigeria recently signed the AfCFTA, which makes it the 54rd country to sign the agreement. The very fact that 54 out of the 55 member states of the AU have signed the agreement signifies a commitment to Africa’s unity and economic prosperity. However, without concrete implementation plans, AfCFTA will only remain a “revolutionary idea”.
It is estimated that the success of the AfCFTA will be to connect 1.3 billion people and create a $3.4 trillion economic bloc. It would create an expanded market for African goods and services, integrate national markets to regional markets, leading to economic diversification, structural transformation and the enhancement of human capital. Beyond fostering inclusive growth in Africa, the success of the AfCFTA can build Africa’s resilience to financial and economic crises.
In theory, the AfCFTA is a great idea; the question is, are countries like Nigeria ready to take advantage of the benefits that have been projected would come and are there structures/policies in place that would militate against possible challenges?
All the 53 countries that are signatories to the agreement have developed and progressed differently; some are more prosperous than others. It is envisaged that the benefits of the AfCFTA will accrue unevenly depending on a country’s manufacturing, supply and competitive capacity. Factors like security and politics will also play important roles in ensuring the effectiveness of the agreement. Nigeria, for instance, has to take more concrete steps in improving securities at the borders and ports. If there is going to be free movement of goods, it is important for borders to be watertight to ensure only products that meet the quality mark are in the markets. More so, the government would have to put more efforts into providing infrastructure like good road/rail networks and power supply to improve ease of doing business.
There is also concern about the negative effect cuts in tariff will have on the fiscal revenue of economically weaker African countries. Hopefully, the creation of a single market should be enough incentive for such countries to invest in manufacturing.
It is said that a robust manufacturing sector is a fundamental path to economic growth and development. Nigeria is import-dependent, as are most African countries. Thus, the AfCFTA poses a unique opportunity for African countries to become more industrialized, which would, in turn, create jobs for a large chunk of the unemployed population. Industrialization or a manufacturing-centred economy is what transformed countries like the USA, Germany, UK, France and more recently, China to some of the world’s wealthiest nations.
The AU has to devise comprehensive policies and legislations regarding standard and quality of goods, market access for goods and services, competition, dispute resolution, Intellectual property, etc. More so, there is a need for conformity assessment by an independent body set up by the AU to ensure goods meet the specifications and follow the guidelines provided by the AU.
The economic growth of a country more often than not causes a positive ripple effect that has the capacity of improving the standard of living of people in that country while at the same time sustaining the development of the nation. It can lead to the provision of infrastructure in all communities, reducing poverty, increasing employment, reducing crime rate and improving the provision of quality healthcare and education among other benefits. This is why it is of utmost importance that the AfCFTA be implemented rightly because it has the potential of being the first recipe in transforming Africa into the global powerhouse of the future.
Nabila Okino is a lawyer and rights advocate passionate about sustainable development and social change in Africa. She wrote in from Abuja.