The African Continental Free Trade Area: Renewed Pan-Africanism Through Trade
There’s a new buzzword in town — AfCFTA. The African Continental Free Trade Area which came into force in 2019 is the largest of its kind in the world. The business community, that is the private sector and the politicians across Africa have waved it around like a wand that can wish away the continent’s many problems like hunger, under-industrialization, climate ruin, jihadist extremism, and other host of issues. Truth be told, the idea of creating the world’s largest free trade area seems to be a herculean task, especially for a continent whose governments more often than not lack the altruistic capacity to effect meaningful positive change in their various societies.
Anyways, this isn’t the first time the gospel of pan-Africanism has been preached on the continent. The movement finds root in the twentieth century — a time when flames of independence raged across Africa, and Africans were freed from direct colonial exploitation by European powers. At this time, anti-colonial agitators like Ghana’s Kwame Nkrumah philosophized that Africa could resist European imperialism by uniting politically and economically. Pan-Africanism was the ideology that birthed the Organization of African Unity, the predecessor to the African Union within whom the AfCFTA was conceived and nurtured.
Chinua Achebe’s 1958 history-defining book “Things Fall Apart” best describes what European imperialism did to pre-colonial African societies which had their respective cultures and systems of doing things. In a nutshell, European imperialists fractured the African society. In the name of “civilizing” the Africans, they imported European ideologies like the Westphalian state, which I dare say they poorly adapted to Africa and its peculiarities. Concerned only with making a profit, European powers arbitrarily carved territories allotted to them in the 1884 Berlin Conference where Africa was partitioned.
It was one of two things — either people of the same ethnic nationalities were torn apart in two different countries by lines drawn on the map by Europeans, or people of different unrelated ethnic nationalities were lumped together in the same country. An arrogant imperial mindset didn’t deem it fit for Africans to have a say in the shaping of their continent — foreigners who had little to no knowledge about the continent called all the shots. In my humble opinion, this is the bedrock of Africa’s many political and socio-economic woes since independence. In most countries on the continent, the process of state creation was superficial, and it only makes sense that there were and still are many ethnic-fueled conflicts raging across the continent. The 1994 Rwandan genocide which shocked the world is a good illustration of this.
Nevertheless, pan-Africanism posits that interconnectedness among the countries of Africa would help reunite brothers who were arbitrarily partitioned into different countries by the Europeans. Also, it would help Africa easily form consensus in global politics on the roundabout issues of multi-dimensional poverty, underdevelopment, and climate devastation commonplace on the continent.
Currently, Africa is the world’s hungriest continent with about 300 million persons considered food insecure in 2023. Another negative stat that further confirms Africa’s deplorable condition is the continent’s status as the least industrialized place in the world. Lacking the much-needed value-addition industries, Africa’s place in the global value-chain economy is mostly in the primary extractive end where countries on the continent suffer the ironic resource curse.
By softening their borders, sort to say, states in Africa in a European-Union-styled approach can spur development and industrialization on the continent through policies that relax migration and reduce trade barriers, both the tariff and the non-tariff kind. As of January 2023, intra-African trade stood at 18%, the lowest intra-continental trade in the world. This is paltry when compared to Europe’s 69% intra-continental trade and Asia’s 58%.
Yet, all is not lost in Africa, the promise of the AfCFTA is a promise of increased trade and prosperity among the continent’s states and their citizens. The vision of the architects is a single African market with about 1.3 billion people and a potential to almost double to about 2.4 billion people by half of the century. More so, the continent is young — about 60% of its people are below 25; that’s a demographic blessing that can yield great dividends for the continent if invested properly. Just as China and other Asian economic miracles have illustrated in the past four decades, a young population bulge could easily mean a productive workforce which can staff Africa’s industries.
Furthermore, another indicator of the perfect timing of the AfCFTA is the ever-changing global landscape which has in recent times been reorganized by the COVID-19 pandemic, Russia’s invasion of Ukraine and heating tensions between the world’s two largest economies — the United States of America and China. First, the COVID-19 pandemic and the resulting lockdowns exposed over-dependencies on the global value chain when China, the world’s factory shut down resulting in a shortfall of face masks across the world.
Another wake-up call to the unhealthy dependence on the global value chain was the Russian invasion of Ukraine in 2022 which saw the European Union’s energy prices skyrocket as the block’s ties with Russia deteriorated. The EU relied heavily on Russia for its gas. At the start of Russia’s invasion of Ukraine in 2022, about 40% of the EU’s gas came from Russia. However, in a speedy and costly maneuver, the EU diverted Russia’s gas trade to allies and non-hostile states like the United States thereby diminishing Russia’s gas trade with the EU to about 12.4% in 2023.
In a similar fashion, as tensions boil over between the world’s two largest economies, measures are being put in place by the United States to curb what it has countlessly referred to as unfair trade practices by China. This hard stance on China seems to be a point of convergence in America’s bipartisan politics. Both the Republican presidency of Donald Trump and the Democratic presidency of Joe Biden have used instruments from the protectionist toolbox to keep China in check. Trump’s era of protectionism was tariff hikes which sparked a trade war with China. Similarly, Biden’s administration has, to the discomfort of America’s ally the EU been dishing out free money to domestic manufacturers most notably in the green energy and semiconductor industries.
Nevertheless, the United States and the EU both agree that trade dependence on China needs to be reined in. To this end, the West is intent on diversifying its supply chains away from China to prevent a repeat of the awkward position the EU found itself in with Russia. The West has also argued that diversification would make its supply chains more resilient to shocks similar to those experienced during the COVID-19 pandemic. In pursuit of this diversification objective, the agenda in Washington and Brussels was initially dubbed “decoupling” but has ever since been diluted to the less confrontational “de-risking.”
From the point of view of Washington and Brussels, de-risking supply chains in the context of China means diverting trade where necessary away from China to other states, preferably friendly states and where possible back home to the United States and the European Union. Some commentators have cautioned against this move by the US and the EU as it has a protectionist undertone and has the potential to undo globalization as we know it.
Nevertheless, other commentators like the World Trade Organization’s Okonjo Iweala are more optimistic and have even welcomed the West’s idea of diversifying supply chains. According to the Director General of the WTO, the trend of diversification represents a “re-globalization” which creates an opportunity for states in the global south most notably in Africa to partake more in the global value chain economy. These states are the losers of the last wave of globalization as they were unable to industrialize and pull their people out of poverty in the highly competitive world economy.
Nonetheless, this is where the AfCFTA becomes instrumental. The hope of the AfCFTA is in the creation of a 1.3-billion-people trade bloc making Africa an attractive investment destination because of the sheer market size. Added to Africa’s young and price-competitive workforce, investments into the continent would spur industrialization providing an alternative manufacturer for the West looking to wean itself off of China’s manufacturing. This would also create a supplier of manufactured goods for China which has in recent times been seen transferring some of its low-end industries like textiles to other developing states like Ethiopia.
In conclusion, for the AfCFTA and its many promises to fully transcend imagination, there’s a great need for a concerted effort like never before seen on the continent. To drive this point home, reference must be made to the native African Ubuntu philosophy of community. In the simple words “I am because we are,” Ubuntu suggests that the community of 55 states that make up Africa need to cooperate to surmount the infrastructural, technical, capital and policy hurdles that currently stand in the way of the AfCFTA fully materializing. Pan-Africanism is necessary for the AfCFTA to float, conversely, when it eventually matures, the AfCFTA through trade would bolster pan-Africanism by further integrating Africa.
