As the ‘world’s largest free trade area’ approaches, a lesson from the past

In 1958, Ghanaian president Kwame Nkrumah stood before hundreds of delegates from 28 African countries at the All African Peoples’ Congress in Accra, Ghana and uttered the (in)famous toast to the “United States of Africa.” At the time, the majority of Africa did not even have political independence yet, much less the capacity to agree on the mammoth agreements, treaties and unions that could make a continental political union even remotely possible, but by the gods, was it a great speech!

Just 8 years after his famous “United States of Africa” speech, Nkrumah found himself ousted from power in a military coup. Some claim he was so caught up in his Pan African pseudo-empire project that he took his eye off the ball of local politics and the Ghanaian economy. Others insist that Osagyefo was nothing but a great man with huge plans for Ghana and Africa, who was not allowed to action his vision. Whatever the case may be, the only fact that mattered was that Dr. Nkrumah ended up dying in Bucharest, Romania, 6 years after the coup, and the “United States of Africa” project died with him.

Until it was briefly resurrected by a flamboyant North African strongman who also died and condemn it to a second death.

The AfCFTA must place substance over style

It probably came as a surprise to all of about 5 people in Africa that following the much publicised January 1 launch date of the AfCFTA, the launch was duly postponed. According to Secretary General, Wamkele Mene, AfCFTA member states currently lack the customs procedures and facilities to make tariff free trade feasible. Of course your average trader who buys electronics in Aba and sells them in Abidjan could have provided this insight for free months ago, but ho hum.

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If the AfCFTA is to escape the fate of Osagyefo’s “United States of Africa,” countries like Nigeria must respect the treaty enough to stop using unilateral border closures as blunt force policy instruments to bully smaller neighbours

Assuming that we have finally figured out that (shock gasp!) certain infrastructure needs to be in place before the AfCFTA is worth the paper it is signed on, we will also hopefully cotton on to the fact that the purpose of the AfCFTA is to make Africans wealthier by accelerating cross-border trade across the continent – not to cosplay independence-era Pan Africanist sentiments and fantasies.

Indeed, if integrating 54 economies is too much to bite off at our current state of development, we could hack the process by breaking it down into regions and putting the necessary infrastructure into one or two countries across each of Africa’s 5 regions. In so doing, one can escape the legal and logistical nightmare that would be involved in putting Benin and Djibouti on the same page, by making those countries defer to Nigeria and Kenya respectively. The bigger countries can then carry out the trades on behalf of everyone else. This is a crude process and it would not be called the “AfCFTA,” but at least it would stand a greater chance of being operational than the current paper AfCFTA.

Africa must embrace capitalism

The other aspect of this conversation that inevitably results in much throat-clearing and pulled faces is the fact that by definition, a free-trade area is nothing if not a bastion of free market capitalism. The clue is in the name – free trade. Currently, many African governments and thought leaders are trapped in a strange mental space where they sort of agree that African economic integration is key to continental development, but they also immediately default to the usual jingoistic, navel-gazing, protectionist policy dross that has served us very poorly for over 60 years.

Let us be very clear about something; a free trade area is not a community of nations who agree that colonialism is bad, independence is good, and Africa must unite – that’s called the AU, and it has the accompanying track record of over half a century of utter uselessness. A free trade agreement is not a symbolic thumbing of the nose at “the west” as some have very naively put it. A free trade area is not a political flight of fancy that can be turned on and off at will.

A free trade area is an integrated supranational economic zone, which functions according to the laws of free market capitalism. In a free trade area, the efficiency of the market in allocating resources for most things is uncontested. Countries in a free trade area have figured out the perfect balance between competition and cooperation, which is why a single Airbus aircraft has a vast supply chain feeding from across the entire EU. In a free trade area like the EU, you do not get France producing aircraft and Germany also producing aircraft only to fight each other and use unilateral border closures to fight their squabbles – they work together instead.

If the AfCFTA is to escape the fate of Osagyefo’s “United States of Africa,” countries like Nigeria must respect the treaty enough to stop using unilateral border closures as blunt force policy instruments to bully smaller neighbours. They must stop enabling navel-gazing politicians who push half witted, illiterate sentiments about the foreign bogeyman from next door “dumping goods on our domestic market.” African countries must learn what capitalism is and stop using the power of the state to distort commodity markets for everything from fuel to national currency.

The market must be allowed to do its job, and to do so across borders. Personally, I do not believe that the current generation of Buharis, Magufulis, Musevenis, Kagames, Kenyattas and Bongos will ever agree to lose overwhelming control over their national economies like so, because they keep hold of power by determining who gets to be financially successful or not.

Let us hope that this one time, they prove me wrong.