Free trade is necessary to increase Africa’s economic development

Date: Dec 5, 2022 | News, Opinion Pieces


Professor Tshilidzi Marwala is the outgoing Vice-Chancellor and Principal of the University of Johannesburg. From 1 March 2023, he will be the Rector of the United Nations University and UN Under-Secretary-General. He is on Twitter at @txm1971.  He recently penned an opinion article that first appeared in Forbes Africa, December 2022 edition.

As the African continent, we find ourselves somewhat in an economic depression. Despondently, this represents a significant setback for the continent that showed an impressive growth trajectory just a few years ago. As Frankema and van Waijenbourg indicated in a 2017 journal article, “Africa Rising? From a Historical Perspective”, the African growth story in the last two decades had overthrown the ‘Afro-pessimism’ narrative that dominated the 1980s–2000s and replaced it with an Afro-euphoric outlook. However, this is no longer the case. 

An African Development Bank (AfDB) report recently revealed some of the deep fissures, including the effect of climate change, which is mounting a threat to the lives and livelihoods of Africans. The economic troubles are arising from the Russia-Ukraine war, and pushing a further 1.8 million people in the African continent into severe poverty. In 2023 these crises will add another 2.1 million to Africa’s additional financing needs estimated at $432 billion. Because of these reasons, it is apparent that our growth story is facing a trough. 

We seem a world away from the rising Africa story that dominated before the pandemic. The economic boom we experienced at the time is projected to lift the region’s ‘bottom millions’ out of poverty by 2030. Yet, data indicates that around 30 million people in Africa were thrust into deeper poverty in 2021 due to approximately 22 million job losses. Furthermore, growth has faltered significantly in 2022 amidst a global environment with several new tremors, high volatility, and uncertainty. Some experts have called for a significant change to relaunch the African economies. 

Arguably, this could arrive from the African Continental Free Trade Area (AfCFTA). The agreement brings together 55 African Union (AU) member states with a combined population of 1.2 billion people, a rising middle class, and a Gross Domestic Product (GDP) of approximately $3.4 trillion. The 2022 CEO Trade Survey Report by Pan African Private Sector Trade and Investment Committee (PAFTRAC) surveyed over 800 private sector players between March and June 2022 and found that while there was significant 

optimism that the AfCFTA will revitalise African trade, there is considerable uncertainty on how this will be rolled out. As a rudimentary explanation, through policy that emphasises increased intra-African trade through deeper levels of trade liberalisation and enhanced regulatory harmonisation and coordination, the AfCFTA is envisioned as a way to reshape our approach to the economy on the continent through boosting trade ties between African countries. 

The United Nations (UN) Economic Commission for Africa projects that the AfCFTA has the potential to increase African economic output by $29 trillion by 2050. Africa accounts for only about 2.4% of total global exports and is also considered a minor player in its own region. This is because trade barriers are immense, and poor infrastructure is in place. It has long been demonstrated that international trade drives growth and poverty reduction. The AfCFTA promises to usher in trade facilitation policies that reduce non-tariff barriers. For instance, the AfCFTA launched an online mechanism allowing businesses to report trade barriers and monitor them. Elsewhere, introducing trade facilitation policies such as standardising procedures, implementing a common rule of origin and installing one-stop border posts is expected to open intra-African trade. Additionally, the emphasis on revitalising the manufacturing industry on the continent will shift Africa’s economy away from one that is commodity and resource-dependent. 

Though the pandemic presented a significant setback for implementing the AfCFTA, we have seen some progress in recent months. In October 2022, for instance, we saw the rollout of trade deals between eight member states with 96 different products that are duty-free and quota-free. This has been encouraging, given the lag between the promise of the AfCFTA and the tangible impact since its implementation. It seems that this agreement will be a manifestation of the vision of the former Ghanaian president Kwame Nkrumah, who once prophesied, “We shall accumulate machinery and establish steel works, iron foundries and factories; we shall link the various states of our continent with communications…It is within the possibility of science and technology to make even the Sahara bloom into a vast field with verdant vegetation for agricultural and industrial developments.” Indeed, Africa rising may find the AfCFTA an avenue for a lasting narrative. 

*The views expressed in this article are that of the author/s and do not necessarily reflect that of the University of Johannesburg.

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