Free-trade deal is just what Africa needs
The global celebrations on Wednesday marking the International Day for the Elimination of Racial Discrimination happened in the background of a third moment of African thought in Kigali, Rwanda.
Prof Gilbert Khadiagala of the University of the Witwatersrand identifies two moments of African thought.
The first was African PanAfricanism and African integration. Pan-Africanist ideas formed the incipient knowledge about how Africans could organise themselves without colonial strings.
Embracing various strains of cultural revivalism such as Negritude, the Back-to-Africa Movement and African personality, Pan-Africanism dovetailed with sociologist Karl Mannheim’s notion of utopia, the dreams that form the groundwork for transformation.
The second moment is the African Renaissance and the New Partnership for Africa’s Development. Thabo Mbeki’s African Renaissance, according to Khadiagala, reflected the seismic transformations in the South African milieu. In the new SA, with a Bill of Rights and Constitution envied by the world, the African Renaissance sounded tangible.
More fundamentally, the African Renaissance was inspirational and heartwarming in the corridors of the Group of Eight and Davos conclaves, where the clarion call had changed from “stop blaming donors” to “it is now time Africans took control of their affairs”.
The third moment, I believe, is the signing of the African Continental Free Trade Area (AfCFTA) agreement. It brings together 55 member states with a combined GDP of $2-trillion and 1.2-billion people.
African countries trade more with their former colonialists than among themselves.
The continent’s export basket is dominated by commodities, with fuel representing just over 50%, while manufactured exports are estimated at 18%. Leaders envisage improvement in intraAfrica trade, which was estimated at 12% in 2016.
A major sticking point in AfCFTA is the single currency and the free movement of people. On the currency, the “Afro” as some have suggested, a lot of work has been done by African central banks in harmonising standards and flows, although there is still more to be done.
Countries such SA face huge challenges in allowing free movement of people. SA is the largest economy in Africa and attracts investors and skilled and unskilled workers seeking entrepreneurial and employment opportunities.
Competition for jobs and weak government institutions to tackle social challenges lead to social unrest, which spills over to violent attacks on people from the rest of Africa.
It is estimated that 200 lives have been lost in anti-African attacks in SA in the past 23 years, indicating a deep-rooted problem that does not seem to have an end in the future.
SA’s economic success, ambitions and history are inextricably linked to the rest of the continent.
It is imperative that President Cyril Ramaphosa signs the AfCFTA agreement to usher in a new beginning for SA, which stands to benefit more than the rest of the continent by anchoring the development of the continent and capitalising on the huge infrastructure build that is under way.
For example, only 38% of the African population has access to electricity. The penetration rate for the internet is less than 10%, while only a quarter of Africa’s road network is paved.
Studies have shown that poor road, rail and port facilities add 30%-40% to the cost of goods traded among countries in Africa.
SA should harness its unique position and leverage its combination of funding capacity and technical expertise, including a better assessment of the risk. The knowledge that has been accumulated in the Renewable Energy Independent Power Producer Procurement programme could also be shared with the rest of the continent.
While SA’s economic potential remains constrained at 3%, the AfCFTA agreement provides possibilities to increase its economic potential.