The African Continental Free Trade Area (AfCFTA) is finally going to be launched on 1st January 2021, which will be a major milestone in the economic history of the continent. With the setting up of the new secretariat in Accra, Ghana functioning in full swing, hopefully the implementation of the world’s largest free trade market will b smooth and fast, provided there is a strong political will to integrate the economies, keeping in mind the long term interests of the continent, even if some countries have to undergo transformational hiccups.
It is instructive to analyze the challenges ahead. Foremost is increasing the intra-trade in the region. During the period between 2015 and 2017, the intra-trade (export and import among the countries in the region) in Africa was only 2%, which is negligible as compared
to America, Asia, Europe and Oceania where the corresponding figures were 47%, 61%, 67% and 7% respectively. The continent has to go a long way to catch up even Asia, which is considered as a laggard region in terms of catalyzing regional trade.
Being positive about the result is one thing and working towards achieving the goal is another. Demography helps Africa to achieve the goals with close to 1.3 billion people in 54 countries and a combined gross domestic product (GDP) of US$ 3 trillion. It is equally true that the continent is fraught with many contradictions that can put the growth pendulum in the reverse gear. The sporadic rivalries among the countries, particularly neighbors, distrust among governments, which spills over to citizens, lackluster law and order, scant respect for rule of law in some countries, commanding heights of government
owned organizations, inadequate skill formation and mounting debts, weak democratic institutions etc are some of the cliffhangers the continent has to surmount to create an ecosystem that self propels growth.
Perpetration of the colonial economic model of the continent can be a legacy. But the lethargy in breaking that continuity can be traced to its present and past rulers, who would have consciously preferred to work under that regime for one reason or the other. It is time that countries try to shun that growth model, which are dictated by the colonizers to serve their ends. Education and skilling are levelers. It is time for hallowed organizations like African Union, African Development Bank and proliferation of government and non-government bodies to create sound social infrastructure in the continent by adding a network of educational institutions of all hues – primary, secondary and higher schools of learning- skill imparting institutions, incubation centers for grooming entrepreneurship etc.
Africa is generally referred to as a poor continent. In a relative sense not all countries are poor. Countries like Nigeria, South Africa, Egypt, Kenya, Egypt, Morocco, Tanzania etc have GDP much higher than the lower rung African countries, which are categorized as
least developed ones. Also, countries like Equatorial Guinea Seychelles, Mauritius and Gabon have higher per capita income comparable to some of the middle income economies. Also, there are a good number of countries in the continent having oil wealth. These countries cannot be compared with their poorer counterparts like Somalia, Central African Republic Democratic Republic of the Congo Burundi Liberia Niger,Malawi and Mozambique . Needless to say, these countries merit a lot of accommodation and special treatment in AfCFTA, be it in terms of time for integration of trade, tariff level and protection of the domestic industry.
Industrialization of Africa is the buzzword now mainly for two reasons: one for realizing more value by way of trading and two; for creation of employment. For AfCFTA that should be the cardinal principle. That route is not necessary through setting up large
corporations but through small and medium enterprises. The advantage is that model of growth spurs private initiative, employment opportunities and inclusive growth.
