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EPAs are bad for Africa

New Era, Namibia

EPAs are bad for Africa

By Tarah N. Shaanika

21 April 2011

The position taken by Namibia with regard to the signing of the Interim Economic Partnership Agreement (EPA) is commendable and should be a guiding principle for further negotiating trade agreements between Africa and the rest of the world.

I salute the Namibian Government for its bold stand with regard to EPA and for standing up to the arrogant European Union. The whole of Africa should do the same as we now negotiate for permanent EPAs.

In fact, I do not agree with the manner in which these EPAs are being negotiated.

The approach taken by the European Union (EU) towards the negotiations for EPAs with the African, Caribbean and Pacific (ACP) nations will prove to be one of the greatest impediments to Africa’s economic development. I am saying so because of two reasons; the first one being the division it has caused within African countries.

While Africa has spent a lot of time, efforts and resources towards the achievement of political and economic integration which can make it a truly one single market, EPAs are suggesting a fragmented Africa with several trade arrangements with the European Union.

This will make the attainment of deeper economic integration in the African continent difficult and I will come back to this later on in this opinion piece.
The second reason why EPAs are an obstacle to Africa’s economic development is that they are discouraging the production of manufactured products in Africa for both the African and the world markets.

As far as I can see, the EPAs will ensure that Africa remains a good source of raw minerals for the industrialised economies and a good market for processed products from Europe and the rest of the developed countries.

Europe itself developed under stringent tariff regimes that protected its markets against imported products in order to promote their own businesses and products.
Having developed their industries by using high tariffs and other forms of taxes, they are now demanding that Africa must open up for their products while they know too well that these products can easily dominate the African markets and prevent African industries to develop.

For the above two reasons, I reject the proposed EPAs and would advise African states through the African Union to abandon current negotiations and rather push for negotiating towards a common position and a single trade arrangement with the EU which trade arrangement will be favourable to Africa’s industrialisation.

The current arrangement for trade negotiations to which our leaders unfortunately agreed to, is that the EU (negotiating as a single block) would enter into trade negotiations with several groupings of African countries based on geographical positions of such countries. As a result, Namibia is grouped with Angola, Botswana, Mozambique, Lesotho, Swaziland and South Africa.

This is called the SADC Block that is basically SACU plus Angola and Mozambique. The rest of other SADC member states are negotiating in other blocks, thereby segmenting SADC and Africa into pieces. Why our leaders agreed to this divide and rule type of arrangement is for everyone’s guess.

I believe that the Europeans had a clear strategy right from the beginning aimed at ensuring that Africa remains divided to make it easy for them to continue entrenching their domination in shaping Africa’s economic agenda which is in their favour.

The proposal for African states to negotiate in groups rather than as a single block was made by the EU to Africa and perhaps because Africans trust too easily, they thought it would be a better idea without realising the long-term implications of this arrangement on their economic integration ambitions.

How do you create a customs union, a common market and a single monetary union if your member states have different trade arrangements with third parties? This arrangement is senseless to say the least!

Through colonisation, Africa was already divided. You have the so-called Francophone countries, Portuguese-speaking countries, Spanish and English-speaking countries.

On top of that, the division of Africa by the colonial powers plus the genocide committed against the African people which wiped out major portions of African populations created several single countries with very tiny populations which make such countries to have very insignificant markets.

You now have little countries which are hardly viable for speedy economic development. This division has created an excellent opportunity for the former colonial and other powers to manipulate Africa and exploit its resources with impunity. The Europeans have plans to continue with this manipulation under the EPAs and we should not allow them to do so.

Africa’s strength lies in its unity and its industrialisation and future economic development will depend largely on the level of its unity and integration.
Many African states are too small and weak economically to be able to face the ruthless global market on their own. But as a single political and economic block, Africa can have so much power to dictate its own economic and political destiny.

The population of Africa has reached one billion, making it the third largest nation on earth after China and India if Africa is seen as a single nation.

Africa would be the 8th largest economy in the world after the United States, China, Japan, Germany, France, United Kingdom and Italy. This means that Africa’s economy would be bigger than some large economies such as Brazil, Canada, Russia, India, Spain and Australia.

On top of that, Africa has the youngest population with up to 70% of its population between the ages of 15 and 45.

And more still, Africa is a very rich continent in terms of natural resources.
With all these good attributes, Africa can and must become a serious economic force to be reckoned with at the global level.

Our biggest weakness is our division and inability to see things beyond the boundaries of our own countries which were set up by foreigners in any case.
Despite wonderful speeches by African Heads of State at the African Union summits and other platforms, we have never been able to craft and implement practical initiatives aimed at cooperating in economic terms.

It is still more difficult for Africans and African goods and services to move around within the continent due to stringent visa requirements and trade restrictions.

Last year, I spent three hours at the airport in Maputo because I did not have a visa to enter Mozambique but travellers from Portugal and United Kingdom who travelled on the same plane with me were allowed in immediately. I was allowed entry after paying U$100.00 but not before I spent a good three hours there.

Two years ago, I was kept for five hours at the airport in Addis Ababa, Africa’s glorified Capital City where I had gone to attend the annual General Assembly of Pan African Chambers of Commerce and Industry (PACCI), representing the Namibia Chamber of Commerce and Industry (NCCI) which is a founding member of that body.

The reason for keeping me there was that they were given the name of John Endjala, who was then the President of the NCCI by the Ethiopian Chamber of Commerce and Industry, our host and not Tarah Shaanika.

As it was a Sunday, I could not reach the staff at the Namibian Embassy to assist me and the Ethiopian Chamber only intervened when they were told about my situation by my Zimbabwean colleagues whom I met at the airport. I wondered why Africans like me had to face that kind of treatment when visiting their own “Capital City”.

Just a few days ago, I was refused entry into South Africa because I travelled from Kenya and forgot my yellow fever card in a Nairobi hotel where I was accommodated.
I had to spend the night in a transit hotel at the OR Tambo International Airport before proceeding to Namibia the following day.

My meeting with a South African company had to be cancelled because I could not enter the country. When I asked what the South African health authorities would have done if a South African citizen had forgotten his/her yellow fever card in East Africa, I was told in no uncertain terms by the South African immigration officers that they would have allowed him to enter but could not do the same to me because Namibian immigration authorities mistreated South Africans at border points.

So, in a way, that was partly also a reciprocal punishment to me for sins committed by Namibian immigration officials who mistreated South Africans when they visited Namibia. I was shocked!

As far as the movement of goods is concerned, my little research revealed that some European products attract less duties in some African countries than products from sister African countries because of some trade agreements between the African countries concerned and their European former colonial powers.

In the former French colonies in Africa, French companies are automatically given the right of first refusal for major infrastructure construction jobs as a result of independence pacts signed between those colonies and France before the political independence of those colonies.

The French benefit more in those countries than any other nation including African nations. The pacts even call for compulsory presence of French military bases in the former colonies as well as depositing all their foreign reserves in the French central bank which they cannot touch without the French government’s approval. When African leaders such as Laurent Gbagbo of Ivory Coast questioned these pacts and acted against them, the French made sure that they were removed from office. Yet, the AU and African leaders are quiet about these stupid pacts designed by the French to remote-control Africa from Paris.

Many African leaders who stood up against the influence of western powers in Africa and initiated programs and projects which would have brought about industrialisation in Africa were eliminated.

Kwame Nkrumah of Ghana was overthrown and had to die in exile for attempting to do what the Europeans and Americans advised him not to do because it would have brought industrialisation to Ghana. He borrowed money from a non-western country (westerners refused to lend him money anyway) to build a hydro-electric dam which would have provided sufficient energy to fuel industrialization in the country.

On top of that, he championed African unity and threatened the western interests in Africa. He was shown the door! Shame on those African sell-outs who were used in this counter-revolutionary act!

The way forward for Africa is to recognise the fact that the Europeans and other foreign powers do not have an interest in seeing Africa developing economically. They care less about poverty in Africa and actually prefer that Africans remain poor.

When they bomb Libya or Ivory Coast under the pretext of preventing loss of lives of Africans or safeguarding democracy, we should know that their real reason for bombing African countries is to ensure long-term economic benefits for themselves from those countries.

If they were genuinely interested in saving African lives, they would have done so in Rwanda, Burundi, Namibia and many other African countries.

They slaughtered Namibians like somebody hunting game during the German colonial occupation and then watched as Namibians continued to be slaughtered by their South African cousins during the latter’s illegal occupation of Namibia. Why did they not bomb PW Botha’s henchmen in Namibia then?

Africa also needs to recognise that when western powers come up with EPAs and the likes, under the disguise of WTO’s rules which were made by them anyway, specifically to satisfy their aspirations of keeping Africa where it is today, these powers actually want to make Africa open up its market so that they can do what they want.

When countries such as Namibia refused to sign the Interim EPA, which was proposed by the EU to manipulate African governments, the EU was so agitated that it threatened to stop Namibian exports to the EU on a duty-free arrangement. But what they never said and would never have done is to even threaten to stop importing Namibia’s raw mineral resources.

I am sure the reader would know why the EU cannot even contemplate stopping to import Africa’s raw mineral resources if a certain African country like Namibia refuses to sign an Interim EPA.

Their industrialisation and continued survival is so dependent on Africa’s mineral resources that if all exports of these resources from Africa to Europe were to be stopped, the European economies will face serious threats of bankruptcies. This is where we do not realise how powerful Africa can become.

Africa must thus recognise the power and strength of its combined market and resources so that it can use that to dictate its own destiny and guarantee a prosperous future for its people. We must emulate the Chinese example. China followed a gradual process of opening up its market with clear conditions attached to any foreign companies wanting a share of the Chinese market or to invest in China. Opening up of the African market should also be done in a gradual manner – the Chinese style if we are to become a serious global power.

If I had my way, I would impose higher import tariffs for manufactured products entering the African market from outside and allow African manufactured products to move freely within Africa for a period of 10 to 15 years.

Duties from an African country to another should be abolished completely and remove all non-tariff barriers to trade within Africa. I would also ban the export of certain raw minerals which are crucial for the development of specific industries within Africa.

I would strengthen the AU, and all trade negotiations with foreign powers will be done through the AU only. There would be common external tariffs for the whole of Africa and any agreement which any individual or group of African countries may have with foreign countries or block of countries will be superseded by African Union regulations and external agreements.

I would pay greater attention to education, infrastructure development and import substitution. All these would off course be done gradually, not within one night. But done, they would!

In my view, the current EPA negotiations are flawed and should be discontinued. Through EPAs, the African market will be opened up for imports from Europe without any guarantee of significant investments in the African economies.
Africa’s industries are still weak and small. They cannot compete fairly and squarely with their competitors from Europe.

In addition, a significant number of European products are subsidized heavily, giving these products an unfair advantage over their African competitors.

The large size of European businesses allows them to drop their prices anytime they want without risking bankruptcy. Their African competitors cannot do the same.
These EPAs are thus not in favour of Africa and Africa’s economic integration ambitions. They will result in a strong domination of our market by European products and make Africa simply a source of raw minerals which will continue to fuel European growth and domination of Africa.

Africa’s industries will not be able to grow as they will not be able to cope with competition from Europe. So, the African market will be served by products from Europe and perhaps China and elsewhere while its capacity to manufacture its own products will be jeopardised.

The EPAs will also mean that Africa’s unity project is hampered. Having several trade agreements with external powers makes it difficult for Africa to move with speed on the path of genuine unity and integration, unless if we do not really mean what we say when we speak about deepening our political and economic integration.
If we are serious about it, then Africa should not allow itself to negotiate in a divided fashion for division is the cause of its weakness. We should thus stop these EPA negotiations and go back to the drawing board!

• Tarah N. Shaanika is the Chief Executive Officer of the Namibia Chamber of Commerce and Industry (NCCI). This opinion piece is written in his personal capacity and not on behalf of his employer or anyone else.