By Mr. George Boateng and Ms. Beatrice Oforiwaa Dankyi
The landmark African Continental Free Trade Area (AfCFTA) agreement, which will be fully operational in 2020, has the potential to create a continental free-trade zone with a combined Gross Domestic Product (GDP) of USD$3.4 trillion, according to the African Union (AU). This trade agreement, if implemented fully, would become the largest in the world. The AfCFTA is one of the ﬂagship projects of the First Ten-Year Implementation Plan(2014-2023) under the AU’s Agenda 2063—”The Africa We Want.” Realistically, what do Africans really want?
The AfCFTA emphasizes the reduction of tariffs and non-tariff barriers, and the facilitation of free movement of people and labor, right of residence, right of establishment, and investment. Yet the hype around the AfCFTA’s agenda could experience a boomerang effect if negotiations on some protocols and annexes become protracted. Despite its extensive propagation by the AU leadership, some experts have cautioned against the way ahead for the AfCFTA, yet expectations remain high. There are several challenges on the road ahead.
Member nations of the African Union vary in their preparedness to execute the requirements of the agreement and its related protocols and annexes. It is also a fact that in order for the AfCFTA to thrive, the continent needs to address the existing annual infrastructure deﬁcit—about USD$108 billion according to the African Development Bank(2018)—to be able to drive free trade. Additionally, the continent would require billions of dollars to strengthen supply chains as well as ﬁscal and monetary policy in order to ensure that the beneﬁts of the agreement are maximized. Primarily, there is the need to develop national strategies to guide the implementation of the AfCFTA. Accordingly, African countries must be willing to have open borders. Coincidentally, developments such as Nigeria’s August 2019 closing of its borders with Benin and Ghana may cripple the AfCFTA’s effectiveness, especially when all the involved countries are signatories to AfCFTA.
In the perspective of the great pan-Africanist, Dr. Kwame Nkrumah, “It is clear that we must ﬁnd an African solution to Africa’s problems, and that this can only be found in African unity. Divided, we are weak; united, Africa could become one of the greatest forces for good in the world.” Likewise, Ethiopian Prime Minister Abiy Ahmed’s recent Nobel Peace Prize honor can also inspire Africans to pursue the Africa they desire. To this end, Africans need to rally around the AfCFTA to make it a success. This is all the more important given the suboptimal impact on Africa’s development that has been derived from multilateral trade agreements to date. The AfCFTA might be the last grasp chance for Africa’s economic transformation.
George Boateng is a Research Analyst at the African Center for Economic Transformation based in Accra, Ghana and Beatrice Oforiwaa Danky is a Ph.D. candidate at the University of Ghana.