African Free Trade Area ‘Ambitious But Achievable’

The 19th African Union Summit
The 19th African Union Summit in Addis Ababa

African countries should not underestimate the task of ensuring that an African Free Trade Area (FTA) gets off the ground, AU Commission director of trade and industry Treasure Maphanga said as the African Union’s 19th summit opened in Addis Ababa, Ethiopia on Monday.

Speaking at the Permanent Representatives Committee meeting ahead of the summit’s opening, Maphanga told reporters that getting African countries to trade among each other was a huge task, one that needed commitment from all parties.

The theme for this week’s summit is “boosting intra-African trade”, and the heads of state that will arrive later this week are expected to thrash out ideas that will lead to a more valued continent.

“We are moving from the premise that this is ambitious, but it’s feasible,” Maphanga said. “This is a project that belongs to the continent, and we [the AU] are agents and facilitators, and our role at the end of the day is to assist in monitoring it to ensure its success.”

At an AU summit earlier this year, African leaders endorsed the plan, expected to be operational by the end of 2017.

It envisages a combined gross domestic product (GDP) of US$875-billion from 26 countries. The East African Community (EAC), Common Market for Eastern and Central Africa (COMESA) and Southern African Development Community (SADC) have already begun negotiations to merge, which is a precursor to a single trade area across the continent.

According to the AU, the three regional economic blocs constitute 58% of the continent’s GDP and 57 percent of its population.

South Africa has thrown its weight behind the plan, with President Jacob Zuma saying it would go a long way towards addressing poverty and underdevelopment.

“We expect that we will have the opportunity to consolidate the architecture that was adopted at the last summit, and that architecture was very clear in terms of the continental frameworks and the structure that will support the FTA agenda,” Maphanga said.

Africa had realised that without trade and investment and speeding-up economic self-reliance, there would be no progress on integration, she added.

Critics of the plan have argued, however, that Africa was wrongly integrated into global trade, citing cheap labour and raw materials. There is also doubt on the level of political commitment among the continent’s leaders to push the plan.

But Maphanga insisted that member states would be the key drivers of the project and that “there is no need to think too much about what others are saying”.

“We have realised that we need a transformation of the patterns on trade. Without industrialisation and the value addition, we will not make any difference at all in terms of future trade patterns.”

The Africa trade committee, which consists of heads of state, would need to keep the FTA project alive with regular progress reports to the assembly, and this should go beyond the current summit.

She pointed to the progress that she said had been made by East and Southern Africa, singling out Kenya as enjoying the highest level of intra-African trade.

A study has shown that Kenya had, over a five-year period from 2006 to 2010, exported horticultural products valued at Ksh30.5-billion – six times the value of imports (Ksh4.8-billion).

The exports increased at an annual rate of 14.3%, from Ksh3.9-billion in 2006 to Ksh6.8-billion in 2010, while imports increased at a rate of 26.2%, from Ksh0.6-billion in 2006 to Ksh1.4-billion in 2010.

The main market destinations for Kenya exports by value were Somalia (63%), Uganda (10%), Tanzania (8%) and South Africa (5%).

“So we see that there are examples, and this is something that countries can look at,” said Maphanga.