Africans across the continent have warmly welcomed the recently established African Continental Free Trade Area (AfCFTA) which they perceive as an outright guarantee of a boost in trade, economic growth and integration across the continent.
The AfCFTA that went into force on May 30, 2019 and entered its operational phase following the African Union (AU) summit on July 7, 2019 was established with a long-term goal of deepening integration among African Union member States and building a prosperous and united Africa.
The AfCFTA’s main objectives on the other hand are to facilitate, harmonize and provide better coordination of trade regimes as well as the elimination of challenges associated with multiple and overlapping trade agreements across the continent. It is hoped that through this continental integration, African economies will strengthen competitiveness of the local industries, realize economies of scale for domestic producers, better allocate resources and attract foreign direct investments.
Although the AfCFTA has been embraced with a lot of optimism and positive expectations, Africans should however, not forget the fact that prior to its establishment, there already existed regional trade blocs and organizations such as SADC, EAC, COMESA, ECOWAS, CEMAC, SACU and others which were originally formed with each having its own goals and objectives, but in essence their main aim was to achieve economic prosperity through regional integration.
Shortcomings
These regional trade blocs however, have not lived to the expectations of member countries and have somewhat not been that successful in achieving their goals and objectives as initially set out due to a number of challenges over the years that have scampered their success such as trade imbalances caused by high trade barriers leading to relatively low intra-regional trade, existence of multiple and overlapping trade agreements that have led to complicated trade relationships and most recently political squabbles to mention but a few.
Although studies indicate that regional trade agreements enhance trade, this however varies from region to region and whereas regions such as SADC, SACU and CEMAC have exhibited the occurrence of a very small but significant share of trade benefits over time, other regions such as the EAC have on the other hand seen a decline in trade benefits over time thus further indicating an overall shortfall of regional trade blocs in achieving their objectives.
Whereas it’s not fitting to conclude that regional trade blocs have been a total failure given the fact that we have seen a number of limited successes registered over the years such as an overall increase in Intra-African trade which has increased from around 10 percent in 1995 to 15.4 percent as at present; increased efforts at promoting democracy; preventing regional conflicts; harmonization of institutional development etc., this however, comes as a precautionary signal that Africans should not assume an automatic or instant success of the AfCFTA as there are still a lot of base efforts to be employed by all concerned stakeholders and member states to foster its success and to additionally ensure that it does not head to a similar path as the not so successful regional trade blocs. This is not intended to undermine or to overwrite the anticipated success of the AfCFTA, but serves as a lesson to be drawn from previous similar efforts directed at steering regional and continental integration.
The Express News
