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Opinion

Trade War? What trade war? Africa is moving in a different direction

Tom Carver / Jul 2018

Image: Shutterstock

 

The dark clouds of a trade war hover over western countries, but there is one region of the world which seems surprisingly unflustered by the prospect: Africa. At first sight, this might seem naive: having failed to diversify sufficiently during the boom years when commodity prices were high, African economies remain over-reliant on the export of their natural resources, and a trade war in the developed world would raise tariffs on African exports and reduce demand for their raw material.

Yet Africa is resisting the protectionist itch - and in fact appears to be moving in the opposite direction. On March 21 this year, 44 African countries signed the African Continental Free Trade Agreement (CFTA) in Kigali. At the time, the international press, reluctant to take their eyes off Trump’s Twitter feed, barely noticed - ironically, it was the day President Trump announced $60bn of tariffs on China.

The CFTA is not yet in existence, and it has some way to go before becoming a reality: 22 countries need to ratify it before it comes into force, and to date only a handful have. But what matters is not so much the legal agreement as the mindset.

The mindset has shifted

Up to now Africa has only been paying lip service to free trade without really meaning it. Now - just as the rest of the world is pulling up the drawbridges - African countries are getting more serious about opening their markets.

Alongside the CFTA, the heads of state also signed a Protocol of Free Movement to encourage greater mobility within the continent. 10 African countries now allow visa-free travel to citizens of other African countries, and the AU has released an AU passport intended to grant visa free travel between all 55 AU members. Rwanda has even gone a stage further and made the country visa free to the citizen of every country on the planet.

It’s a rich irony that after years of xenophobic nationalism, Africa might be finally tearing down their border posts just as the US attempts to build a border wall and the EU tries to stop the Schengen agreement from collapsing.

At a recent conference in Accra, senior African businessmen including the continent’s richest man Aliko Dangote, and several African presidents discussed their determination to open the continent up to the free movement of goods and people. A decade ago, such a gathering would have been full of calls for aid and appeals to the West to do more to lift the continent out of poverty. But nowadays, the World Bank, the UN, and western institutions are increasingly marginal at these kinds of events. The mood in the corridors was notable for a guarded sense of optimism. Speakers talked of the fact that Africa will have more young people entering the workforce than the rest of the world combined by 2035 not as a demographic disaster, but a historic opportunity.

Guarded optimism

The contrast between the dark narratives circulating in the rest of the world about Africa and the incipient mood of hopefulness within the continent is very striking. While the American president dismisses Africa as being full of shithole countries and Europeans obsess about mass migration, it’s beginning to dawn on African leaders (at least the more enlightened ones) that the rest of the world has lost interest in bailing them out. They can see that western aid budgets are being cut back and that the wells of compassion are drying up.

But this may be just what the continent needs.

No one should underestimate the enormous hill that the continent still has to climb, but Africa is beginning to believe in its own potential. The excitement around the CFTA is understandable. Only 15% of African trade is currently between African countries, compared to 70% for Europe; the room for Africa to grown on the back of its own markets without relying on the outside world is enormous.

By finally driving a dagger through the continent’s persistent dependence narrative and kickstarting its own engines of resourcefulness, it’s just possible that Africa will emerge stronger, fitter, and more united from this moment of global protectionism.

 

 

 

Tom Carver

Tom Carver

July 2018

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