The commencement of AfCFTA and beyond

Source: GITFIConline.com

By Alexander Nyarko Yeboah

Tema Jan 2, gitficonline—First January 2021 is marked as the date for the coming into force of the Africa Continental Free Trade Agreement (AfCFTA) which is to begin a process that would enhance intra-Africa trade and boost the economy of the continent.

This agreement, among other things, seeks to remove trade barriers between African states and ensure that there is an unrestricted flow of goods and services across the continent, creating a single market for about 55 countries with a combined population of 1.2 billion and a total Gross Domestic Product (GDP) of about US $ 2.5 trillion.

It is therefore obvious that the economic benefits of AfCFTA is enormous for Africans, and if well harnessed, has the potential to transform the economy of the continent and give Africa a competitive advantage in the global market.

Yet, there are many concerns that ought to be addressed before the idea of a free market area may come to pass.

Firstly, African industries ought to be prepared to take advantage of this development. This is because, as the Greater Accra Chairman of the Association of Ghana Industries (AGI), Mr. Tsonam Cleanse Akpeloo, puts it, “there’s going to be winners and losers.” This is because those industries which are better prepared to take advantage of the free trade agreement would gain, while those who are ill prepared would lose their markets to foreign domination.

What this therefore suggests is that, African states should just not be excited about the coming into force of the agreement, but should be concerned about how to advance their industries to produce to meet the demand of the huge market that would be created.

In this regard, it is expected of an industry located in say Ghana to be ready to produce enough to export to other African countries whilst at the same time improving upon the quality of the products such that the said product would still do well in the face of the influx of similar products from other sister African countries into Ghana.

What it also means is that an industry that is not able to meet such a demand would not only be forfeiting the benefits of the huge African market that would be created but would also suffer from the coming in of similar goods into the country in which the product was manufactured, more so when the imported products are more sophisticated and cheaper.

It means that, overnight, manufacturers and entrepreneurs would be expected to put their industries together to improve upon the quality of products they produce while at the same time producing at a very reasonable price in order to compete with products from other parts of the continent.

This, therefore, means that governments of African countries should assist industries within their jurisdictions to grow and expand, otherwise the continent risk creating powerful cartels of manufacturers and entrepreneurs who would dominated the African market significantly and throw all others out of business.

Aside this concern comes the issue of whether Africa has what it takes to grow this concept into a fully-fledged agreement that would indeed transform the continent.

Currently, the European Union (EU) has evolved a system that is working perfectly to the benefit of Europe. Apart from creating a common currency with all its benefits, EU has been able to facilitate intra-Europe trade in such a way that has created prosperity for the various countries of the Union.

Many are skeptical about the African story. Are Africans capable of politically taking advantage of AfCFTA such that it would play the economic role it is intended to, or is it going to be one of the many African projects that never succeeded?

Currently, Africa is suffering from the influence of colonialism, such that ties to the colonial past is sometimes stronger than ties to the African roots. In this regard, many wonder whether these independent African states would be willing to see the collective interest of the continent as a priority over loyalty to some foreign powers.

For AfCFTA to succeed, some believe that these personal allegiances to the Commonwealth of Nations, the Francophone Bloc, and others, should not play into the promotion of intra-African trade.

One therefore wants to believe that, like Ghana’s First President, Dr. Kwame Nkrumah tried to link the success of Ghana to that of the whole African continent in Ghana’s Independence Day Speech, AfCFTA faces serious treat if Africans are still not seeing the need to form a unitary state since the ability of the individual states of the continent to succeed is shaky.

It is therefore worth noting that, as the theme for the fourth annual Ghana International Trade and Finance Conference (GITFiC) has it, AfCFTA ought to be optimized for Africans. This theme suggests that Africans stand a risk of leasing out this great opportunity to industrialize to outside forces who would merely take advantage of the lack of true unity among Africans.

What this would mean is that, in lieu of promoting manufacturing in Africa to meet the huge African market, African entrepreneurs could be coerced into importing foreign products into Africa to take advantage of the free trade area, and this is possible because of allegiance to some foreign powers.

Africa is indeed blessed as a continent, but her fragmentation as a result of colonial dominance is something her political leaders should eradicate. It is obvious that the proponents of AfCFTA had done well in bringing the continent this far, but, what could really help Africa is the total unification of the continent and the undoing of the bonds of colonialism.

Before the full glare of the world is a wonderful opportunity for Africans to industrialize and take advantage of a huge African market. The question is, would the continent be in a position to actualize this, or would it just be another opportunity in passing?

African leaders owe it a duty to the continent to ensure that this opportunity, also, does not pass by, and that it would serve as a springing board for the economic boom of the African continent and a possible foundation for the total unification of the African people.