On the same day that the UK ceased trading with the free movement privileges of an EU member and imposed new crippling trade barriers on itself in the name of pride, sovereignty and independence, African countries opened for business their trade borders and markets under the terms of its African continental free trade agreement. Duty-free trading of goods and services across borders is now under way despite the COVID-19 pandemic, which had resulted in a 6 month delay in implementation.
The new market, created under the African Continental Free Trade Area (AfCFTA) agreement will consist of 1.3 billion people across Africa, with a combined gross domestic product (GDP) of $3.4 trillion.
This is not just a trade agreement, this will in the medium and longer term transform Africa from poverty to plenty. African countries will at last join the world on equal terms and have the freedom to exploit and trade their resources, production and services globally. In the shorter term, intra-African trade, especially at the borders, will be boosted; new investment will encourage industrialization, create millions of new jobs, and improve the competitiveness of African companies.
It will also empower women by improving their access to trade opportunities. Women make up the largest share of informal traders, representing almost three quarters of traders in some countries.
There are of course some matters still to resolve. Countries will have to agree on remaining issues such as rules of origin, a key element in international trade and the cornerstone of preferential trade arrangements. Countries that have ratified the AfCFTA agreement have already agreed on rules of origin on over 80% of tariff lines.
There are also still some countries that have neither signed nor ratified the agreement although these are a minority and every month sees practical progress towards full ratification by all countries. 36 of 54 countries, including Africa’s biggest states, have ratified the agreement. Poor transport and infrastructure throughout the continent are also limiting factors but their revival and regeneration will be part of the solution and not remain an expression of the problem.
Getting agreement on all this, however, was quick, even compared to the emergence of the European Economic Community in the 1950s and the slow march of Britain to Brexit. The African free trade agreement took just under 5 years from negotiations to implementation. It will now create the world’s largest trading bloc since the launch of the World Trade Organization. Intra-African trade is predicted to rise by as much as 50%.
It will be difficult for some African leaders to drop their decades-old habits or attitudes about their precious borders. But the Covid-19 experience of managing the pandemic on the continent has shown that leaders must not only meet and talk more continuously across borders but also that free movement mentalities and perspectives must be aligned. For Britons, increasingly marooned on the edge of Europe, the developments are salutary and instructive. There are many proud, independent, sovereign states in Africa, but none are so stupid as to deliberately cut trade links with other countries, especially those on their doorstep, and especially during a raging pandemic.
A good analogy is Madagascar, like the UK an island nation off a big continent with a strong history of trade and commerce. Madagascar is a small country with an impoverished past and a wealthy future. The UK is a small country with a wealthy past and an impoverished future.