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Kigali Accord - 1 Africa 1 Currency - Open Borders ?
By: Hawk Date: March 22, 2018, 1:50 am
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Article Source : Mail & Guardian
HTML https://mg.co.za/article/2018-03-22-africas-free-trade-fairy-tale
Video Source : Al Jazeera
HTML https://youtu.be/n1QgSgt8OPs
Simon Allison in Kigali
A cross section of Africa’s most powerful people gathered in
Kigali this week to sell a dream - and sell it hard.
Rwandan President Paul Kagame, who revelled in his role as host
of this extraordinary African Union (AU) summit, described this
dream as “among the most consequential actions that this
Assembly has ever taken”. Former Nigerian President Olusegun
Obasanjo said that anyone who did not support it was a
“criminal”. South Africa’s Cyril Ramaphosa invoked not one but
three liberation heroes to underscore the significance of the
moment:
“This is probably just as important as the formation of
Organisation of African Unity (OAU). This is what Kwame Nkrumah
dreamt of, what Julius Nyerere wanted to see, what Nelson
Mandela wanted to see realised. It’s truly a new dawn for
Africa,” he said.
The presidents were speaking, of course, about the signing of
the African Continental Free Trade Agreement, a landmark trade
deal that would create a single market from the Cape to Cairo,
and from Djibouti to Dakar.
On Wednesday, 44 African countries committed themselves to
eliminating cross-border tariffs and making border posts more
efficient. 27 countries signed an additional protocol to allow
for the free movement of people across those borders.
If fully realised, this agreement would revolutionise trade in
Africa. For the first time, Kenyan manufacturers would be able
to sell their products in Nigeria without paying tax at every
border crossing; a Ghanaian PR firm could open an office in
Namibia without going through any regulatory hoops; and all
African citizens would have the right to live and work in any
African country.
“The border gates are now going to fall apart,” said Ramaphosa.
Better Together ?
The dream of continental integration has long been a cornerstone
of the AU, and the OAU before it. The AU’s long-term strategy
document, Agenda 2063, paints a utopian vision of a continent
effectively without borders, where citizens travel on an African
passport and spend their afros, the proposed single currency.
The logic is simple: if Africa wants to compete economically
with the big boys, it must play as a team. Africa’s entire
population is roughly the size of India’s, but Africa is 55
countries, with 55-odd currencies and 55 regulatory environments
and 55 different sets of red tape. Doing business on the African
continent is a nightmare, both for foreign investors and for
African businesses who want to expand.
In fact, it’s easier for African businesses to trade outside the
continent. The statistics don’t lie: as of 2016, intra-African
trade accounted for just 17.6% of Africa’s total exports. In
Europe that figure is 70%.
“Economic integration thus responds not only to aspirations born
out of Pan-Africanism, but also to a practical imperative linked
to the economic viability of the continent,” said Moussa Faki
Mahamat, chair of the African Union Commission. “Our peoples,
our business community and our youth, in particular, cannot wait
any longer to see the lifting of the barriers that divide our
continent, hinder its economic take-off and perpetuate misery,
even though Africa is abundantly endowed with wealth.”
But Mahamat, who replaced Nkosazana Dlamini-Zuma last year, also
sounded a note of caution. He is more familiar than most with
the disconnect between the AU’s noble ideals and its no-can-do
record when it comes to implementation - and he knows that the
continental free trade dream is still some distance from
becoming reality. He pleaded with his fellow leaders to this
time prove the doubters wrong.
“...some actors, but also our own peoples, have seen so many
proclamations remain a dead letter, so many commitments without
practical execution that they have come to doubt the strength of
our commitment. This summit must, therefore, mark a break…It
must confound those who, outside Africa, continue to think, with
barely concealed condescension, that our decisions will never
materialise.” said Mahamat.
Unfair trade?
Obstacles to a full, continent-wide implementation of the free
trade area are large and many. The most serious, for now, is the
reluctance of Nigeria, the continent’s biggest economy, to join
the integration club.
Muhammadu Buhari so nearly signed on the dotted line. Summit
gossip had it that the Nigerian President was already on his way
to the airport in Abuja when he abruptly cancelled his trip,
apparently swayed at the last minute by vocal opposition from
trade unions - a constituency he cannot afford to alienate in
the run-up to next year’s election.
“We at the Nigeria Labour Congress are shocked by the sheer
impunity or blatant lack of consultation in the process that has
led to this,” said Ayuba Wabba, who heads the labour movement.
“We have no doubt this policy initiative will spell the death
knell of the Nigerian economy.”
These fears are not unfounded. Although all economists seem
united in predicting that greater economic integration will lead
to greater prosperity - potentially increasing intra-African
trade by 52% in the next four years - there may also be a shake
up of the established economic order. So while the continent as
a whole will win, there will be individuals, companies and maybe
even countries who will lose out in the short to medium term.
Persuading them to act for the greater good regardless of the
personal cost will be a major political challenge.
Another challenge, of course, is to get the free trade agreement
ratified. It now goes to parliaments all over the continent who
must rubber-stamp the text, a process which could take years.
The bureaucratic hurdles have already claimed a major scalp:
South Africa, which in Ramaphosa has one of the agreement’s most
vocal cheerleaders, did not actually sign the agreement.
Ramaphosa said that although he was committed to doing so, legal
requirements meant that local stakeholders must be consulted
first.
But even should all this red tape be cleared, more torturous
negotiations lie ahead. As much as African leaders deserve
credit for taking just two years to thrash out this agreement,
to make the self-imposed deadline - encouraged by Kagame, who
was desperate to conclude the deal during his term as AU chair -
they postponed dealing with some of the most contentious issues.
The protocols on competition policy and intellectual policy have
yet to be agreed; nor is there any accord on rules of origin,
the criteria to determine where a product is actually from.
These are usually among the most contentious areas of any free
trade negotiation, so expect plenty of contention to come.
For all the fine words and noble ideals expressed at the Kigali
summit, and for all the undoubted progress that has been made, a
fully-functional African Continental Free Trade Area is still
many years - and lots of compromise - away.
So put away your afros, because you won’t be spending them quite
yet. And don’t bank on disappearing borders any time soon.
[img]
HTML https://cs.mg.co.za/crop/content/images/2018/03/22/3MJdTNSSvRfaTP1V2Qbg_Graphic_Continent_Africa_free_trade.png/600x350/[/img]
MORE ARTICLES:
HTML https://www.dailymaverick.co.za/article/2018-03-22-au-extraordinary-summit-ramaphosas-major-step-towards-the-african-continental-free-trade-area/
HTML https://www.news24.com/Africa/News/african-nations-sign-largest-free-trade-agreement-since-wto-20180321
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