Economic growth, industrialisation, sustainable development, regional cooperation and integration in Africa are just a few of the desires and expectations riding on the African Continental Free Trade Area (AfCFTA).
At this time of COVID-19-induced economic and social woes, the AfCFTA has been hailed as a continental comeback strategy, and as a way for Africa to reposition itself on a global stage. The formation of new markets, the projections for higher employment numbers, more diverse products and the stimulation of industrialisation pathways are part of the vision for the AfCFTA as African economic integration is realised.
The COVID-19 pandemic has induced a crisis in the 'real economy' of production and not merely within the financial sphere (as was the case in the 2007- 2009 global financial crisis). This makes it is even more important that the AfCFTA reinforces counter-cyclical interventions that reposition African economies within a global economy faced with the threat of a long-term deflationary period.
The agreement has come a long way since 2012 when heads of state in the African Union decided on its establishment. Since its adoption in 2018 in Rwanda, 54 countries have signed the AfCFTA agreement, meaning all African countries except Eritrea have shown intent to participate.
Removing tariffs on 90% of traded goods and allowing services, commodities, products and people free movement are among some of the basic protocols to counter trade barriers and slow development on the continent.
The agreement aims to boost trade by 52% by harmonising a market of 1.2 billion people to become the world's biggest free trade market. The operational phase was launched in 2019 after 30 countries had ratified the agreement.
But Africa is not a country. It is a diverse and divided continent with varieties of capitalism, some tightly controlled by the state, some more liberal. A snapshot of the 54 country signatories gives an indication of the nature of the diversity.
Underpinning the economic, legal, policy and social issues is a commitment to a vision of Pan-Africanism - an idea initially championed by Ghana's first President, Kwame Nkrumah, during the 1960s.
This idea must now hold the AfCFTA together as the key instrument for addressing many African challenges, including boosting the continent's development to improve socio-economic conditions for African people, and decolonising inherited systems of governance and ways of doing business.
African Union (AU) Chairperson and South African President, Cyril Ramaphosa, was clear on this point at the February 2020 AU summit where the AfCFTA Secretary-General was elected. He is quoted as saying, 'the era of economic colonialism and imperialism, under which Africa was a pit stop in the global assembly line, has passed'.
The agreement has the potential for catalytic change but, at the same time, poses challenges and even raises the possibility of losses to individual countries, smaller regions and smaller businesses.
In assessing the potential impact of AfCFTA, it is necessary to consider the obdurate conditions that persist through a particular understanding of an economy and the rules of that game.
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