True continental FTA will not be achieved soon

No one denies the importance of economic integration in Africa. The case for economic integration in Africa is so easy to make that pronouncements about it are often made with prophetic optimism. Such was the enthusiasm at the launching of the African Continental Free Trade Area (CFTA) in Kigali, on March 21, 2018. However, the rhetorical support for integration in Africa is often out of sync with reality. History and the lack of genuine political discussions on integration at the local level would suggest that a true CFTA will not be achieved any time soon.

In June 2015, three regional blocs, the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC), and the Southern African Development Community (SADC), launched a tripartite free trade area (CES-TFTA) with a total of 27 countries. As of today, almost three years later, only two countries, Egypt and Uganda, have ratified the agreement. Ratification by two-thirds of the CES-TFTA members is required for it to come into force.

Many of the 44 countries that launched the CFTA in Kigali are among those who launched CES-TFTA. They are committing themselves to broader integration before fulfilling earlier commitments. The situation is complicated further by the fact that even at the time of the launching of the CES-TFTA and CFTA, some countries had not even ratified the free trade provision in their own blocs. Countries that were hesitant to join the free trade area in their own economic bloc are going to be even more apprehensive about ratifying the CES-TFTA and CFTA.

A flaw in African politics is the disconnect in the debate over regional economic integration. Discussions of economic integration seem to take place mostly at regional conferences and the AU’s headquarters in Addis Ababa, or in whichever city heads of states happen to meet for their various summits. These leaders say little about economic integration when they return home. The topic does not receive much attention in local or national politics. Parliamentary and even presidential candidates often face off without any mention of aspirations for economic integration.

At home, politicians act as if the benefits of economic integration are either so obvious or the impact so far removed from their constituencies that it does not require much discussion. Whatever the case, they see no real need to discuss economic integration at political rallies. Of the 44 countries that signed the launching of CFTA, how many had their parliaments discuss and debate the issue beforehand?

A full-fledged CFTA might happen one day, but a more pragmatic approach is needed. The AU needs a mandate to establish certain guidelines with respect to economic integration.

For example, considering that the ultimate objective is to have a continental economic and monetary union, the AU should set a maximum number of individual blocs that a country may join. The AU should also establish the minimum requirements of openness and operations for an economic bloc to be officially considered a free trade area, a customs union, a common market, or a monetary union. If these phases of integration were clearly defined, it would be easier, for example, for two free trade areas that want to merge to do so. They would all have a clear understanding of what the minimum threshold is. Part of what has complicated and prolonged the negotiations by Comesa, the EAC and SADC to form the CES-TFTA, is that their baselines for a free trade area have been different.

Another area in which the AU could play a direct role is with respect to dispute settlement. What is missing in regional economic blocs in Africa is an effective mechanism to resolve disputes and enforce the implementation of agreements. It is partly due to the lack of such a mechanism that countries often make big “commitments” when they have no intention to fulfil them... not unlike signing the CES-TFTA or CFTA with no real immediate intention of ratifying it.

The writer is a professor of economics, La Salle University, Philadelphia, Pennsylvania, USA. ([email protected]). He is the author of Economic Integration in Africa: The East African Community in Comparative Perspective (2017, Cambridge University Press)