A memorable summit of the African Union (AU) and the third celebration of the African Continental Free Trade Agreement (AfCFTA) held in Niamey, Niger, last week. It was all the more remarkable as Nigeria, after 18 months of dithering, eventually signed the free trade treaty. So far, 54 African countries had signed the agreement, while 27 ratified it. The agreement came into effect on May 30, when the required number of African nations, 22, ratified it.
The AfCFTA is the most remarkable step ever taken toward African integration. It is the world’s largest trade agreement connecting 55 countries with a population of more than 1.2 billion people and a gross domestic product of $3.4 trillion. For these and other reasons, it has generated a lot of interest worldwide and a great deal of enthusiasm and optimism in Africa. Some skeptics are afraid that a few countries might dominate the African market. They point to such countries like Nigeria, South Africa, and Kenya.
But their fears are unfounded because Nigeria, with a population of 198 million, lacks the manufacturing infrastructure to compete, let alone dominate. Only South Africa has the capability, but it is constrained by a virulent political and social environment reflected in its recurring xenophobic attacks on foreigners, especially African immigrants. Two waves of ‘Africaphobia’ had swept through the country in the last five years, and 130 Nigerians were murdered in South Africa in the last four months. Kenya, on its part, seems even less ambitions in manufacturing.
It is partly for these reasons that many view the AfCFTA as an opportunity as well as a challenge. One of its most important functions is to enhance competitiveness both at the industry and enterprise level.
The cost of manufacturing in Africa is so high which reflects in the high prices of manufactured goods. In Nigeria, the manufacturer must make elaborate arrangements to generate his own electricity, pump his own water and provide his own security. The AfCFTA may lead to greater pressure being put on the Federal Government to improve electricity supply and other utilities.
Many Nigerian industries have folded up or were driven out of the country because of lack of power. The hope is that a more competitive atmosphere would put greater pressure on industries to exploit opportunities for scale which is likely to bring down their cost of production and keep the price of the goods competitive. Thus a continental market access, it is believed by many, would lead to a better reallocation of resources, which means greater efficiency, a clearer competitive atmosphere and an end to the perpetual “protection” of local industries which has been elevated to an ideology since independence. The idea has also perpetuated inefficiency and is getting more obsolete if not absurd in the era of globalisation.
An integral part of the AfCFTA deal is the action plan for Boosting Inter-African Trade (BIAD) within which the continent is hoping to double intra-African trade by 2022. The present figure is a mere 17 per cent and the AfCFTA is expected to raise that figure to 56 per cent. But there is need to tackle the issue of transportation and communication infrastructure on which the entire African integration scheme truly depends. The 10 Trans-African Highways were planned 48 years ago and, apparently, there was no urgency about their construction. Now that should change. Some of the routes, such as the Dakar – Lagos highway, Lagos – Cameroun – Central Africa Republic (CAR) – Democratic Republic of the Congo (DRC) – Uganda – Mombasa highway are major arteries of the continent, similar to the Cairo – Cape Town Highway, which traverses the continent from north to south.
The Chinese have left the world with a maxim: to enrich a town, build a road. Africa must develop the transportation infrastructure of the continent if the integration is to be a reality. The AU should enlist the help of the Chinese, who appear willing to help. Europe is an example of what ease of transportation can do to bring peoples together, especially by rail. Only East Africa has a significant railway service on the continent. Water transportation in Africa is still problematic.
There is hardly any year horrid tales are not told of mass drowning at sea because the boats are either too old or poorly maintained. Yet it would have been a cheaper alternative to air transportation, which only the elite can afford. We urge the Buhari administration to table the treaty to enable the National Assembly to quickly ratify the AfCFTA in keeping with Section 12(1) of the 1999 Constitution (as amended).