Coronavirus and painstaking negotiations: the free trade area of african patina

Coronavirus et négociations laborieuses: la zone de libre échange africaine patine

Expected on the 1st of July, the actual launch of the free trade area of the continental african (Zlecaf), supposed to become the shopping space is the most populous country in the world, should be postponed to January 2021, because of the pandemic of sars coronavirus, but mainly because the negotiations are held.

The problem of the closure of the borders to mask the effect of the more profound barriers to the achievement of a common market in africa.

On paper, the Zlecaf composed of 54 of the 55 african countries lack the government of Eritrea which has not signed the agreement), or 1.2 billion people, and represents a combined GDP of 2500 billion dollars, the equivalent of the GDP of France. It is the largest common market in the world in terms of inhabitants, but very far behind the european Union in terms of wealth.

It was launched with great fanfare at the african Union summit in Niamey a year ago, in the presence of 32 heads of State, hundreds of ministers and 4 500 delegates, with the ambitious objective to make rapid progress in intra-african trade, to help boost the economies of the continent the least developed.

Intra-african trade represents only 15% of the total trade of the continent, compared to 70% for the european Union.

The effective implementation of the Zlecaf, however, has not much advanced.

“Everyone can see that nothing can be done on the 1st of July”, because “the boundaries of 42 african countries are partially or totally closed because of the pandemic of novel coronavirus, told AFP the general secretary of the Zlecaf, the South African Wamkele Mene.

The ambassadors at the headquarters of the african Union in Addis Ababa have proposed the January 1, 2021 as the new implementation date, a recommendation that must be adopted by the heads of State.

Even this new date is hypothetical, “it will depend on the evolution of the pandemic”, said Mr. Mene, who works in Addis Ababa, the offices of the general secretariat of the Zlecaf to Accra is not yet opened because of the outbreak of coronavirus.

But beyond the pandemic, which blocks the exchanges, the effective implementation of the Zlecaf still remains nebulous.

“It will be a long time”

Only a little more than half of the signatory countries have ratified the free trade agreement, or 28 out of 44. Among them, the economic heavyweights, such as South Africa, Egypt, or even of the weight means, such as Morocco, Kenya and the Ivory Coast.

But other countries are reluctant : the behemoth Nigeria, the most populous country in Africa with its 200 million inhabitants, has still not ratified the agreement, not more than Algeria or Angola, power oil.

“Nigeria is committed in the agreement, but, of course, the Covid-19 has delayed things and we will probably have to review everything,” said the nigeria’s minister of Finance Zainab Ahmed.

In August 2019, Nigeria has not hesitated to close abruptly its boundaries to its neighbours and economic partners, a able ultra-protectionist decided unilaterally to reduce the trade in contraband and to stimulate the national economy. A decision that violates also shamelessly the free trade agreement of the economic Community of States of West Africa (Cédéao), which has still not been lifted.

The coexistence between the Zlecaf and the eight regional economic organizations african already existing-is a question.

“The regional economic communities remain, with their obligations to their member countries”. “We’re building (the Zlecaf) on the liberalisation and the progress already made by these communities”, advance Wamkele Mene, without more of precision.

An integration into a true continental customs union will be discussed in the future, makes sense.

According to the secretary-general, the objective of the negotiations of the Zlecaf is the loss of customs taxes for 97% of the products within 15 years, with a gradual implementation for the least developed countries.

This liberalisation would lead to an increase of approximately 16% of intra-african trade, worth 16 billion, according to calculations of the international monetary Fund (IMF).

A rather modest scale of the continent, including exchanges with the european Union, its biggest trading partner, are two times more important than intra-african trade.

Of the rest, the abolition of customs duties will not suffice. It will also address many non-tariff barriers, such as poor transport infrastructure, logistics, communication, harmonisation of payment systems, as noted by the IMF as many experts.

“It will take a long time to achieve the integration (african), because of enormous infrastructure investments are necessary,” writes the economist of south africa Lumkile Mondi, from the university of Witwatersand, citing the interconnection of oil pipelines and gas pipelines, airports, railways, roads and telecommunication system.

Share Button