In a couple of days, exactly on May 30, the African Continental Free Trade Agreement AfCFTA, will go into force in 22 African nations. For some of them, as members of West African Monetary Union, these agreements are not new, but will just consolidate interregional trade exchanges.
Questions are being raised about issues around the free trade restrictions, but in my opinion, there shall be no major problems. Most of those asking questions fail to see the potential the continent’s cultural, geographical, climatic and socio-economic divergences represent. Each state in the area has a production specific to its natural and demographic resources, which can be an asset rather than a constrain to performance with regional integration. Typologies of commodities or services specific to a state may interest different external markets other than internal ones.
For example, more South African and Rwandan wines against those Europeans on the West African markets, can give a better quality price ratio. So let’s remove these tariffs and non-tariffs barriers without thinking too much, and focus on better strategies by facilitating job creation and greater competitiveness of African micro, small and medium-sized enterprises.
According to the experts, poor infrastructures, losses of tariff revenue, food safety, markets access and high transportation cost are the key obstacles – a fair observation. However, one should not forget that addressing and remedying these problems will contribute to the proliferation of new business activities – an entire new market.
If in general, the tendency is to ignore the priorities for sustainable development on the continent, it is hoped that intercontinental free trade will be effective, and not just a power restricted to a circle of political and economic powers. The expectations are far too enormous to tackle the topic in a basic way, without having a concrete goal with a strong socio-economic impact. Otherwise, we will be faced with yet another policy of economic integration at the regional bankruptcy level.
The priority should be the creation of new wealth, for which the participation of all without exception is strongly required, to make any product that can constitute a resource, an added value, an essential material for the industry coming out of the dense forests or difficult to reach steppes, trade, or craft throughout the area. The objective must be to convey more local products to different markets, so as to be accessible and appreciated to a large extent. It will be necessary to encourage the creation of transit points and wholesale trade, thus reviving rural communities, and not just capital cities. History teaches us that cities in remote areas such as Thies, Mopti, Gao, Timbuktu, centuries before the coastal cities, were great centers of commercial and cultural exchanges that contributed to the greatness of our civilizations during the pre-colonial era.
It is therefore necessary to ensure this continuity, beyond the lack of infrastructure or technology. The strength of Africans lies precisely in their ability to adapt to different circumstances, to reinvent themselves. Despite the worst roads, solutions nevertheless make it possible to bring products to global markets. The African business community needs rather than infrastructures, better conditions for regional value chains and integration into global value chains. This is why, in anticipation of infrastructures investments, the African states should focus on territorial and small businesses development, by regulating, controlling, facilitating any kind of private investments and initiatives, from smallest to biggest ones. Especially now that they need to replace the loss of tariff revenue.
Gisèle Aké is a Business Consultant for the West African Economic and Monetary common market