Editorial

The new USA (United States of Africa) now in sight?

Sunday, June 09, 2019

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Africa as a continent has never known unity, being divided by different, often hostile, ethnic groups, cultures, languages and geography, although some level of trade existed among countries.

Since regular contact with Europeans started in the 17th Century, Africa's vast resources have been systematically exploited and its peoples impoverished, giving rise to justifiable calls for reparations.

It is argued that the continent has never recovered from the impact of Western Europe.

First, as Mr Walter Rodney explained in his classic book How Europe Underdeveloped Africa, the slave trade removed the prime labour force leaving the very young and the very old and thereby completely undermined the economy of whole societies.

Second, during the “Scramble for Africa” in the late 18th Century, the continent was divided up among the colonialists who imposed artificial boundaries which became the untenable nations which now exist.

The result is that Africa is the poorest place in the world. According to the World Bank, more than half of the extreme poor live in Sub-Saharan Africa and the number of poor in the region has increased by nine million.

There were 413 million people living on less than US$1.90 a day in 2015 — more than all the other regions combined. If the trend continues, by 2030 nearly nine out of 10 extremely poor will be in Sub-Saharan Africa.

It has been suggested that if African countries could unite to trade among themselves they could proactively reposition themselves from a subordinate primary producer role in the international division of labour.

One long-touted concept of a united Africa has been a continental free trade agreement. This has finally happened. Agreement on the African Continental Free Trade Area (AfCFTA) was signed by 52 countries in Kigali, Rwanda on March 21, 2018. The required ratification by 24 countries for the agreement to take effect was completed on May 30, 2019 when the AfCFTA officially came into force.

It encompasses a combined consumer and business spending of US$6.7 trillion in 2030. If implemented by all the 49 African Union member countries it will include a billion consumers with a total GDP of over US$3 trillion.

The AfCFTA involves commitments over time to remove tariffs on 90 per cent of goods, progressively liberalise trade in services, and dismantle a plethora of non-tariff barriers. Implementation will start in 2020 and if it stays on track — some say it is more a hope than an expectation — is scheduled to be completed in 2040.

Africa's intra-regional trade at less than 17 per cent of total trade is relatively low compared to other regions, with over 59 per cent in Asia; 31 per cent in the Americas and nearly 69 per cent in Europe. It is estimated that the AfCFTA could lead to an increase in intra-Africa trade by 15 to 25 per cent or US$50-US$70 billion by 2040. Apart from increasing the growth of trade it is hoped that it will stimulate export diversification, which has changed little between 1990 and 2014.

Let us hope that this is a positive turning point in the history of Africa and that centuries-old divisions, tribal wars, and coup d'etats will not continue to prevail over economic sense.


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