AfCFTA

While international trade has undergone significant structural changes recently, particularly with the proliferation of new generation of free trade agreements (FTAs), the debate on the consequences of IIAs for sustainable development continues to widen and intensify. In effect, while there has been fundamental changes in the international investment landscape in terms of players (now comprising state-owned enterprises and sovereign wealth funds) and FDI direction (with emerging economies now being, not only recipients, but increasingly home states), governments are also now adopting industrial policies and development strategies that contrast with their erstwhile hands-off approach to economic development.

In my view variable geometry is likely to further slow down the implementation of the AfCFTA because it is a way to accommodate less advantageous countries or countries unwilling to move as fast as others.  Even if variable geometry is the only way to move forward in trade agreements of the 21th century as some have argued, it makes trade liberalization more complicated and slows down integration initiatives. More detailed research on variable geometry from an African perspective needs to be undertaken because the continent cannot afford the potential failure of the AfCFTA.

The conclusion of the AfCFTA comes in the wake of global trade facing a lot of uncertainty, with more countries becoming more protectionist and the global world trade order facing collapse due to rising tensions. Despite all this, Africa’s regional integration agenda remains at the core. The Protocol on Investments is meant to be continental wide project to protect and promote investments in Africa. The ultimate goal for the AU’s regional integration objectives should be to have one investment framework to regulate the whole continent.

Even though the political situation may have delayed Nigeria's commitment to the AfCFTA at the time of the Kigali declaration, public consultations was never a bad idea. However, the government consultation initiated by the Buhari government and facilitated by the NOTN have come and gone. After the consultations, some initial skeptics have been won over about the benefits of Nigeria signing up to the AfCFTA. However, objectors to the AfCFTA remain, who stand their ground that Nigeria is not ready to join the AfCFTA.

Upon improving its infrastructure, Nigeria could very easily leverage its economic base in distributing its products within Africa and internationally. This is already the case in its ‘soft’ products, such as the Nigerian film and music industry, which has seeped into all nooks of African continent, and is largely received internationally. This can be replicated in other aspects, once the foundation is properly laid internally.

This blog post does not focus on the different reasons that makes integration difficult. Rather, it argues that the structure of the agreements of African Union (AU) contributes to the lack of political commitment among leaders which has been a missing ingredient for successful integration in Africa.

A proper assessment of Rudahindwa’s monograph on the subject of establishing the African Economic Community (AEC) is one that cannot exclude the currents of ongoing reform efforts and the extent to which they are able to move the continent faster towards the dream of achieving the AEC. This invariably raises some methodological questions that border on multidisciplinary approach to regionalism, and the issue of context. The author highlights these two imperatives in the monograph. By using the concept of “developmental regionalism” as an analytical prism, the author situates the discussion within a multidisciplinary paradigm.

There is a feeling that the next decade will be a watershed period in terms of the economic relations between the EU and Africa. Both continents are experiencing sweeping developments that will invariably affect their respective existence and mutual relationships. In Africa, the largest preferential trade area, the African Continental Free Trade Area (AfCFTA), has recently been ratified while in Europe, the EU is navigating the challenges of Brexit. All this is taking place in the backdrop of negotiations between the two blocs to replace the Cotonou Agreement which has since 2000 served as the bedrock of economic relations between the EU and ACP states. How, then, will the Africa-EU relationship be impacted – if at all – by the implementation of AfCFTA?

Cotonou came to disrupt that acquis in at least three ways. First, it abandoned the core principle of unilateral preferences in favour of reciprocity. Second, and more damaging, it jettisoned the issue of trade from its agenda, leaving it instead to economic partnership agreements (EPAs) that were to be negotiated at sub-regional rather than ACP level. The effect of this Cotonou decision in terms of the trade agenda was to effectively demolish the 79-country bloc and replace it with a patchwork of supposedly six sub-regional groupings. Thirdly, and finally, when all but one of the sub-regional groupings on the ACP side were unable to negotiate as cohesive units and reach EPAs at sub-regional level, the EU ended up signing interim EPAs with individual countries, thereby – in the case of Africa in particular – throwing a grenade onto the fledgling regional integration processes underway at the time.

Over the past two decades, a number of factors have disrupted the Cotonou acquis. The opportunity to regenerate the ACP-EU relationship on new terms requires the parties to respond to challenges at the international, regional and domestic levels. At the global level, we have witnessed the declining influence of the USA and the EU on the international stage as emerging economies, like China and India, gain more economic and political power. As the EU’s leverage is not as significant as it was when the CPA was signed almost twenty years ago, multipolarity may present an opportunity for the ACP countries to diversify their partnerships and forge new relationships with non-EU countries.