On the sidelines of the Africa-wide Multi-stakeholders’ Forum on the AfCFTA, held in Accra, Ghana, *Million Habte of the African Union Commission and *Ambassador Nelson Ndiragu express their views on the agreement.
Idon’t think the (AfCFTA) agenda is overambitious as it seeks to achieve Africa’s progress towards integration which is long overdue and is only a framework within which the agreements can be negotiated. Africa needs to be ambitious. This is just about trade but it can expedite Africa’s quest for economic integration. Perhaps it is an ambitious project but Africa needs it. The commitment at governmental level is impressive and it is possible to achieve it. We need to be aggressive about it.
The issue of time has been raised many times but the point is we can focus on that and forget about other critical is-sues. Whether it is fast tracked or done gradually, we will not have a perfect out-come/document. The global, continental and regional dynamics always change and things will change accordingly so we can’t wait for a perfect time.
Again as you are aware, at the regional level there is the EPA with the EU to grapple with but we think the AfCFTA should take precedence over the EPA hence the need to have it done first. Which comes first, integration or EPA? Clearly the integration spearheaded by the AfCFTA. If the AfCFTA is not fast tracked, Africa may go in different directions and we never get to integrate as an economic bloc. The AfCFTA will be an instrument that will set the tone for how Africa, all 55 countries, deals with the outside world. What we have now is a well thought out agreement.
Time We need to be time-sensitive as well, as things are going on at the global level in a fast tracked manner and we cannot keep waiting. Whether we do it faster or gradually, nothing is going to be perfect. The truth of the matter is there are delays from some member countries. This could be taken care of by sensitization and consultation which are key so that key stakeholders like the private sector, labour unions, parliamentarians etc can have their say and appreciate the process otherwise you go one step and take two steps back. So the delays and failure to ratify some of these agreements happen. This is the reason why the AU has embarked on the sentisation and has a well-crafted public information programme, some of which are already happening in various countries. Admittedly, at the regional and national level there is a lot of work to do so we need to coordinate them and make the AfCFTA happen.
Let us not however forget that the AU itself is a membership-driven union with issues brought before it by members. For instance, the ministers of trade have agreed on a work programme. On the part of the AU Commission, they are doing sensitization for the Pan-African Parliament and same thing for the private sector eg the Afro-Champions Club, the springhead of many African businesses.
Deadlines Deadlines yes but let’s agree that this whole thing started in 2012 and the agreement came only this year. Of course, it was supposed to be signed last year, 2017. We shouldn’t just relax. We have to work with deadlines. Let’s not forget that Africa’s intracontinental trade is the lowest in the world and this is something we need to work on quickly and the AfCFTA is the right approach. The AfCFTA, is only one of the initiatives towards Africa’s integration. BIAT, talks about various initiatives and under seven clusters and the AfCFTA is just one, when we bring all the clusters together, it will be a great thing for Africa, so AfCFTA should not be seen as a stand alone. It’s the right thing to do to increase intraAfrica trade.
Challenges The major challenge, however, now is things going on in different directions as countries belong to various RECs, some overlapping and hence poses problems with harmonization. Again, the ability and readiness of countries to use their resources to make something good of this agreement. Individual countries and RECs have a great role to play in all these if we are to make any serious head-way thus navigating these and quickly too, is a major challenge. Productive capacity, is also great challenge in Africa, with most of the economy informal as well. The great dependence on the export of raw materials instead of manufacturing is another major drawback. I think also the problem is in the process as we are not giving ourselves sufficient time to cover each subject adequately. Otherwise, the agenda is clear and linked to Agenda 2063. If things are properly done, we will be able to achieve our goals. If we do it in a pressure-cooker manner, it might not achieve what we want. It will be difficult to implement agreements that countries don’t understand. When countries have the same understanding of the issues it will be easier to implement them and achieve our goals. All these challenges notwithstanding, the AfCFTA, will help Africa to industrialise, provide a bigger market for investment and more employment to the teeming unemployed youth of Africa. The AfCFTA is only half-way in the process of where Africa wants to reach. Maybe even less than that because after AfCFTA, there is the Customs Union, monetary union etc and finally an African Economic Community. So it is a process, a phase towards that.
The AfCFTA’s agenda is based on issues that will address Africa’s problems towards integration and we need to have some agreements in place on each of the subjects to be able to move forward. However, the problem is the process as we are not giving ourselves sufficient time to debate and to be able to cover each subject sufficiently. The agenda is ok and it is not only linked to Agenda 2063 but also its flagship. The only challenge is we are doing it in a hurry. We should take time to discuss it, under-stand it so when we have an agreement all of us will be on the same page. If the framework agreement is properly done, we may be able to achieve our goals but if done in a pressure-cooker manner it might not achieve what we want because it will be difficult to implement agreements that countries don’t understand. When countries have the same under-standing of the issues it will be easy to implement.
Presently, we have the framework agreement in 3 areas, but not the nitty gritty. For example, on trade in goods, there is no agreement on sensitive goods, exclusion list etc and all these can be frustrating. African countries trade in very narrow lines of export now if these are taken as exclusion list by some coun-tries it could block up to 70 percent of intra-African trade. If you take services too we have agreed on the broad sec-tors but within each sector there are sub-sectors, the details of which we have not worked out and if we don’t have all these done and properly too, we are in danger of not achieving the objectives of the AfCFTA. Let’s not forget we have to translate all these into figures and these take time even with goods and services is not going to be any easier. If we get things right, we will be able to stimulate and improve intra-Africa trade which is the whole essence of the AfCFTA. In-deed, BIAT, agrees with African heads of state and governments that by 2022 in-traAfrica trade should double. Currently, intraAfrica trade is put between 12-15 percent but it is hoped that by 2022, this could be 30 percent. We just need to be innovative. We said the RECs are the building blocks of the AfCFTA but we did not actively involve them in the negotiations yet at the lower level we had the task force, a task force which did not do its work because it was sidelined. If we want to speed up things we need to revive the task Force which will then engage the RECs to help coordinate and harmonise issues. For example, individual countries have all kinds of agreements with ex-ternal countries and there are Customs Unions within some RECs and all these need to be tackled for a meaningful Af-CFTA to be achieved. Even ratification of the agreement has become problematic, in COMESA, it’s only Kenya and Rwanda that have done so, in ECOWAS only Ghana, so already we can see the challenges the RECs face. All these have to be addressed for the RECs to be moving together.
If we agree to implement it as it is, it could be the appropriate measure but if some are willing and others are not, it won’t be. You know the taste of the pud-ding is in the eating. Countries have to do something towards the integration agenda. Of course, domestic policies have to change accordingly. Some are hesitant and all that won’t help. It is better they start implementing the agreement and see whether there are problems. If there are problems there are provisions in the agreement that call for remedial measures, review mechanism to mitigate the situation so these are available and can be made use of.
The agenda Presently we have agreed on three areas. We have not agreed on the nitty-gritty, for example in goods, sensitive goods and these can frustrate the objective of this agreement. These details we have not worked out and it could take much longer than we are thinking to reach agreement on these issues. Trade-in-goods, we have dates but not the figures yet. Under services it depends on what we want at subsequent sub-sectors the whole aim is to stimulate and improve intraAfrica trade and if we can achieve this then we will have arrived.
* Million Habte
Impact studies the answer? The level of intraAfrica trade is so low that I don’t see the fear. We may not even need impact studies. If trade within Africa were more than that with the rest of the world, our fears may be justified but our tariff lines are few, the volumes are very low, and that renders an impact study unnecessary. The loss of revenue etc are really perceptions as we saw in the case of COMESA. When COMESA reached the FTA status, those countries that felt they needed to be compensated did not need or use the funds set aside for it because they realized they did not need it. The reverse was the outcome as they got more revenue from the COMESA FTA. Based on this any fears maybe misplaced. Perhaps there is need for more sensitization and information flow to allay the fears of countries as far as revenue loss etc are concerned given the COME-SA experience. Additionally, we have to stop looking at the short run because what matters is the long run. In the long run, this continent will be better off. In the long run this continent will be engaging the rest of the world as one so we will be able to influence global economic decision making. The future is bright for Africa. We only need to get out of the fear syndrome and start implementing the agreement.