African Free Trade – A New Dawn for Africa?

In what was described as a “new dawn for Africa,” leaders from 44 of the 55 countries of the continent ceremoniously signed a trade pact creating a huge single market from Cape Town to Cairo.

The national leaders agreed to eliminate cross-border tariffs and make border posts more efficient. Twenty seven countries signed an additional protocol to allow for the free movement of people across borders, European Union-style.

If fully realized, its supporters say, Kenyan manufacturers would be able to sell their products in Nigeria without paying tax at every border crossing; a Ghanaian PR firm could open an office in Namibia without going through any regulatory hoops; and all African citizens would have the right to live and work in any African country.

“Our peoples, our business community and our youth, in particular, cannot wait any longer to see the lifting of the barriers that divide our continent, hinder its economic takeoff and perpetuate misery, even though Africa is abundantly endowed with wealth,” said African Union Commission Chair Moussa Faki Mahamat.

But despite all the hoopla and fraternal embraces, a shadow dimmed the party – namely the exit of Nigeria’s President Muhammadu Buhari before the signing could take place.

Ten countries, including Nigeria, have now refused to sign the deal, and it must be ratified by all the signatories’ national parliaments before the bloc becomes a reality.

Nigeria, thought to be ready to hop on the free trade train, reconsidered at the urging of unions and the Nigerian Manufacturers Association.

There were some valid reasons to follow the Nigerian President out stage left starting with the so-called “country of origin.” If free trade is supposed to stimulate production in each country, there must be guarantees that foreign companies cannot set up ‘shell’ manufacturing companies in neighboring African countries and simply import finished or almost-finished products into member nations, often at lower prices.

The free import of what could be called pseudo-manufactured goods or what really are trans-shipped finished goods using African countries as ‘transit camps’ compromise the viability of the locally manufactured goods.

“The African free trade agreement has the capacity to hinder local entrepreneurship and encourage the dumping of finished goods in Nigeria,” Buhari declared. The National Labor Congress was more direct: calling the agreement “extremely dangerous” and a “radioactive neo-liberal policy initiative to open up our seaports, airports, and other businesses to unbridled interference.”

Nigeria’s Punch news praised President Buhari in an editoriaL “for his courage, despite the related national embarrassment, to extricate Nigeria from an economic trap which had been approved by his political lieutenants, as the road map to more rapid economic and industrial expansion, with increasing job opportunities, even before prior consultations were concluded with major stakeholders, particularly organized labor and the Manufacturers Association of Nigeria.”

 

Source via Global Information Network

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