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African Union : On the way to a enticing economic pan-Africanism

10/07/2019
00:00

While the creation of the Organization of African Unity was the only historical event to date, the Continental African Free Trade Area is in its turn to become history. This is the first time since 1963 that African leaders have successfully launched a large-scale project for the economic and social development of the continent. In describing the Niamey Summit as historical, Africa's powerful economic partners have not been mistaken. 

Indeed, with its 1.2 billion inhabitants and a gross domestic product estimated at more than 2500 billion US dollars, the potential of the targeted market is immense; and, since intra-African trade activity represents only 16% of total trade, its margin of growth remains very important. This is a big step towards "peace and prosperity in Africa".

This summit of Niamey was therefore expected by a whole continent.

It was also the meeting point for African leaders to formally and definitively launch the African Continental Free Trade Area, Zlecaf. Some 4,500 delegates and guests, including 32 heads of state and more than 100 ministers participated in its launch and inaugurated the five operational instruments that will enable its operation.

The goal of the maneuver is to nibble little by little, the 84% that share Asian and European. With ambition: an increase in trade of 52% by 2022 compared to the year 2010. It is for this purpose that the launching of the African Free Trade Area was given, one year to the day, after the signature of the Zlecaf creation treaty in Kigali where, let us recall, 22 countries had ratified the agreement.

The minimum threshold required was, of course, that the Continental Free Trade Area entered into force on May 30, 2019. Since Kigali, five other countries have ratified the agreement, bringing the number to 27. The other good news is Nigeria. This giant of the continental economy had not engaged until then and its absence would have been a huge handicap for the project. Fortunately in Niamey, Nigeria finally decided to sign the agreement to create Zlecaf and its president applauded at length.

With Benin and Nigeria, the number of countries that have signed the agreement is now increased to 54 countries out of the 55 members of the African Union. The only missing country is Eritrea, which has had a period of reflection according to sources close to the AU.

An old dream that is finally realized.

The birth of this new common market, hailed by all, is the beginning of a great adventure for the Zlecaf. 

According to Moussa Faki Mahamat, the chairman of the African Union Commission, this is a dream come true and the founding fathers must be proud of it. Stressing in his speech that the Zlecaf thus became "the largest commercial space in the world". The first stage of the project seems to be successful, but its course will be long and certainly very difficult, as stated by the Egyptian President, Abdel Fattah al-Sissi, current President of the African Union. For this area to be fully operational, he said, "It will be necessary to remove the obstacles that prevent us from achieving the desired objectives".

Indeed, the negotiations will certainly be long and difficult. The schedule of tariff reductions and the movement of goods imported from abroad are already hotly debated. It will also be necessary to set and agree on the criteria that will define the proportion of African inputs needed for a product to be considered as manufactured on the continent and to benefit from the "Made in Africa" ​​label.

The objective is to eliminate, within five to ten years, tariffs on a set of products representing 90% of tariff lines. What other conditions must be met to facilitate intra-African trade? It will be necessary to provide the continent with communication and equipment in good condition; to make inter-African transport affordable because its high cost remains by far one of the current barriers to trade. It is also important, and to establish an effective administrations. Building a market that is worthy of the African population and its development is a huge project and a long-term project. It will work hard and be patient. 

And the interest of Djibouti in this case?

He is immeasurable! The Republic of Djibouti, under the leadership of its President, Mr. Ismail Omar Guelleh, was very early in the heart of all the diplomatic negotiations that led to the agreement to create the African Continental Free Trade Area. Concerned about African economic development, the President has always been convinced that the integration and promotion of intra-African trade is the best way to get the continent out of poverty. Having participated in countless summits and meetings on the subject, President Ismaïl quickly became one of the great defenders of this project to create the Zlecaf. And, he never lost hope. For this reason, he launched, in his first term, a vast program of development of port, maritime, transport and service infrastructures; to prepare the country for this future African integration of which Zlecaf is the spearhead. Today, with its container terminals, its huge Free Zone, its means of road and rail communication the Republic of Djibouti has transformed into a logistic and commercial platform and can greatly benefit from this new area.

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