move around freely from country to country, each nation satisfying the needs of the
other in a spirit of mutual benefit and cooperation
the lofty dream of Pan-African icons such as Kwame Nkrumah, Thomas Sankara, Julius Nyere and Haile Selassie.
however, nearly half a century after the passing of these great men,
the dream is very far from the reality…
in Africa today, citizens of the Republic of Congo need a visa before travelling to the neighbouring DRC
even though citizens of Singapore, Haiti and the tiny islands of Micronesia need only a plane ticket and a valid passport
only 17% of all international trade by African countries is with other African countries
a sharp contrast to the situation in Asia where 50% of all trade
is between Asian countries and in Europe where the same figure is around 70%
moving goods on a 1500 kilometers Journey from Douala in Cameroon to in N’Djamena in
neighboring chad cost six times more money than moving those same goods
12,000 kilometers from Douala to Hong Kong
however, all of this might be set to change as on the 7th of july 2019
The Federal Republic of Nigeria, Africa’s most populous nation and largest economy by GDP
became the 54th nation to sign up to the African continental free trade area
an ambitious project led by the African Union that aims to create a single market across the continent for
the free movement of people goods and services across all 55 African countries
as of today Eritrea is the only country that is yet to sign up to the project
if all goes to plan the African free trade area will become the largest trading
bloc in the entire world by geographical reach combined in 55 economies with a
total GDP of 2.5 trillion dollars and a population of over 1.2 billion people
to make it a reality African governments will have to remove
over 90 percent of all existing import and export duties on goods and services
from other African countries and also remove or at least seriously reduce all
existing visa requirements for citizens of other African countries by creating
the free trade zone the African Union predicts that you can
increase into regional trade by up to 43 percent over the next five years
Union experts also forecasting additional increases in GDP growth of
between one and three percent for each member country directly as a result of the deal
in terms of the more long-term benefits it is expected that the project
will make the continents more attractive to foreign investors and manufacturers
who will now only need to set up base in a few strategic locations in order to
have access to the entire African market the continents connectivity problem can
now finally be addressed as new roads and railways will need to be built in
order to facilitate the movement of people and goods across the continent
however the loftiest idea by far is the notion of the success of this free trade
zone could pave the way for deeper political union between African states
starting with the harmonization of rules and regulations the creation of an African
Court of Justice the creation of a single currency and central bank and
finally the establishment of a central administrative body overseeing the
affairs of the entire continent the pan-african dream made reality
unfortunately things are never quite so simple commentators and analysts have
pointed out a whole host of challenges that will need to be addressed if the
free trade deal is to have any sort of positive impact firstly there is the
fact that most African economies primarily rely on the exportation of
raw natural resources to Europe Asia and America’s a structure that has been in
place for centuries many argue that this is the real reason why African countries
don’t trade with each other the people of Congo simply have no need for
Nigerian crude oil because they do not have the oil refineries to process it
similarly the people of Nigeria have no use for Congolese coltan, as there is literally
only one mobile phone Factory in Nigeria. it is for this reason as some question
if African leaders are putting the cart before the horse with this project with
most African countries lacking the industrial capacity to process their own
raw materials and export manufactured goods it is questionable what difference
a free trade deal will actually make. tied in with the first problem is the
risk that delicate industries such as textiles and food processing will be
seriously harmed as money-hungry businessmen will see the dropping of
trade barriers as an opportunity to flood the African market with cheap
Asian goods deceptively advertised as made in Africa. the tragic death of the
once prosperous textile industry of northern Nigeria is a perfect example as
the loosening of trade barriers in the late 80s and 90s led to an influx of
cheap Chinese imports which ultimately ended in the loss of half a million jobs
and the closure of over a hundred factories. Now ravaged by poverty
unemployment and terrorism, the region has never been the same since.
when it comes to the free movement of people, the danger here is that the removal of visa
requirements could lead to a mass exodus of people from all across Africa to the
small group of countries with relatively stronger economies such as South Africa,
Nigeria, Ghana and Algeria. The effects of this could be devastating as
demonstrated in 2008 by the wave of xenophobic attacks in South Africa.
finally there is the biggest problem of all vested interests with virtually any
African problem you can point to, they always seems to be a small group of
Africans that personally benefit from the bad situation and would be quite
happy for the majority to suffer as long as it means that their interests will be
protected. As far as the free trade deal is concerned the list of potential
saboteurs is very long. corrupt politicians, oligarchs, customs officers,
importers, exporters, and perhaps the worst of all government-backed private
sector monopolies. one example that is often cited in this
category is Dangote Cement plc, the company owned by Africa’s richest man,
Alhaji Aliko Dangote. Dangote Cement is a 4.1 billion dollar business which
controls 65% of the cement market in Nigeria. Meaning that more than one in
every two buildings in the country is built with Dangote cement. The company’s
profit margins are three times higher than the world average for the cement
industry and have helped Dangote amass a massive fortune of over 9.8
billion dollars making him the richest black person in the entire world. However
it is alleged that Dangote’s profit margins are less to do with his
business acumen and more to do with the fact that the Nigerian government
specifically restricts foreign cement from penetrating the Nigerian market.
It is believed that government protected monopolies of this sort, exists all
across Africa and it is for this very reason that some wonder if the rich and
powerful politicians the benefit from the current system will not simply collude
to sabotage the project, whether by employing delaying tactics or by simply
disregarding the agreement and continuing with business as usual. Ultimately,
no one can say for sure how it’s all gonna play out. But what do you think?
Do you think the drive towards a single market for all of Africa is a step too
soon or do you think it’s a risk worth taking
as ever share your thoughts in the comment section and let’s get the debate
going. Once again is K.B Taiwo for NewAfrica Network, please like, share and
subscribe… and until next time