Time to tone down hyperbole over AfCFTA?

The 21st century has often been described as ‘Africa’s century’ and the ‘world’s hottest new frontier market’. With this optimistic vision in mind, the AU designated 7 July each year as Africa Integration Day (AID), to evaluate the progress the continent has made towards meeting its Agenda 2063 goals and deliver the ‘Africa we want’.

Underpinning this is the conviction that the more integration of Africa’s 55 countries – economically, culturally, politically and spiritually – the greater the chance the continent will fulfil its potential and seize the century.In the wake of the ongoing pandemic, the Ukraine conflict fallout and its associated global shock, AID this year assumed an added urgency. The third edition of the event was held in Lusaka, Zambia under the theme ‘Deepening African Economic Integration in the Era of De-Globalisation”.

For a week African heads of state, CEOs, world leaders, civil society representatives, heads of various institutions and AU partners discussed a wide range of issues on how regional and continental integration processes and initiatives could be used to accelerate Africa’s economic integration in its recovery during the post-Covid era.

The event culminated in a ‘Boma’ (a Swahili word for a protective enclosure), during which the likes of Presidents Ramaphosa of South Africa and Paul Kagame of Rwanda; global technocrats Dr Tedros Ghebreyesus and Dr Ngozi Okonjo-Iweala of the WTO; Amina Mohamed, UN Deputy Secretary-General, and former Western leaders such as US President Bill Clinton and UK Deputy PM Nick Clegg, mulled over the promises and perils of integration.

Can AFCFTA become an African Common Market?

While this is without doubt another high-profile event to add to the bulging African calendar and a stage on which various actors can make rousing and thought-provoking speeches, one has to wonder, once you strip away the rhetoric and the platitudes, just how realistic the Africa 2063 ‘Africa we want’ agenda is.

The entire superstructure has been built on the potential of the AfCFTA to act as some sort of African Common Market or better still, operate along the modalities of the EU, with a seamless movement of goods, people and ideas, stimulating enormous new productivity and generating vast amounts of trade.

That is the dream and a pleasant one but the reality, sad to say, is far different. In its early days, the AfCFTA is already being undermined by entrenched interests, lack of political will, and a general failure to abide by the rules.

The AU’s own statistics make for sober reading. Its Second Continental Report on the Implementation Agenda of 2063 laments that Africa has achieved moderate progress towards “a prosperous Africa based on inclusive growth and sustainable development – due to a decrease in GDP per capita from $3,170 in 2019 to $2,910 in 2021 and high unemployment rates.”

Agreed, figures taken over a small period during the special context of the pandemic should not be used as a yardstick to measure the effectiveness of the push towards greater economic integration, but perhaps they do suggest it might be wiser to temper our expectations a shade.

Unrealistic objectives

To achieve the sort of global development metrics desired over a mere 40 years, as the AU aspires to do, is not realistic; as is its unrealistic and over-optimistic take on the potential immediate gains the AfCFTA will bring.

It might be better to tone down the hyperbole over the AfCFTA rather than increase the volume. A recent trade survey of African CEOs by the Pan-African Private Sector Trade and Investment Committee revealed that the majority felt that “implementing AfCFTA will be a long process that will be achieved by thousands of small steps. Making the required legislative and regulatory changes depends on the political will of governments to make it a reality.”

This is a much more realistic view and not surprisingly it comes from CEOs, hardened and clear-eyed from their daily battles in the unforgiving world of commerce.

In addition to the host of practical problems presented by implementing, or trying to implement common market parameters, there are also ongoing structural and macro-economic issues of concern. Of the 25 countries with the highest sovereign debt default risk in 2022, according to Bloomberg, 13 are from the continent; they include Egypt, South Africa and Nigeria, Africa’s three largest economies.

Integration is a noble aspiration, but it must be based on socio-economic realism. Africa’s quest to become a global economic force at best can only be achieved by taking small but sure steps.

Source: african.business