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Without an end to conflict, the African Continental Free Trade Area is an exercise in futility

Without an end to conflict, the African Continental Free Trade Area is an exercise in futility

Daily Maverick | 11th January 2023

By David Chikwaza and Tanatsiwa Dambuza

The recurrence of terrorism, intrastate conflicts, xenophobia, military coups and interstate conflicts reduces prospects for the successful implementation of the African Continental Free Trade Area.
Alongside dire humanitarian costs, the absence of peace in Africa disrupts economic activities through multiple channels, and its effects are large and persistent. The African Continental Free Trade Area (AfCFTA) implementers need to understand these different channels to better prioritise what can be done to minimise the impacts of conflict.

Is Africa suited to a continental free trade area?

Those who live in Africa — and some who live outside it — have asked this question again and again in their search for solutions to the plethora of problems facing the continent today. The question can also be put this way: Is the continental free trade area system suited to Africa?

The two questions are not the same.

Let us take the first one: Is Africa suited to a continental free trade area? The assumption here seems to be that Africa should be configured to fit into the free trade system. The question seems to preclude any consideration that Africa is more important than a free trade system: the primary interest seems to be in the system and not in Africa.

Now the second question: Is the continental free trade area suited to Africa? The assumption is that Africa is more important than the free trade system. The question presupposes that the system can be appropriated to serve Africa, not Africa to serve it. Is Africa to be the servant of this system? Or is the system to be the servant of Africa?

The answers to these questions can help us comprehensively pinpoint the growth traps and opportunities that surround the AfCFTA.

The answer to both questions is “yes”, but Africa should be the servant first.

First, we must understand that AfCFTA has certain incentives it needs to be attainable, which are political, social and economic in nature. Second, we must understand that Africa as a continent has a responsibility to provide the incentives needed.

Conflict and trade
Critical studies show there is compelling evidence that Africa has not yet modelled itself to suit the conditions that make AfCFTA flourish. The recurrence of conflict takes centre stage in inhibiting AfCFTA’s growth prospects.

Sub-Saharan Africa has been marred by conflict in past decades, though their intensity, nature and geographic distribution have varied over time. The latest significant cases of conflicts in Africa include the Cabo Delgado insurgency in Mozambique in which more than 3,000 people have been killed.

According to studies by the Chr. Michelsen Development and Research Institute, the insurgency has led to the destruction of economic activities and public services, killing thousands, unleashing hundreds of thousands of internally displaced people and posing a challenge to humanitarian aid.

Terrorist activity is viewed as a risk to international investment, with concerns raised about the kidnapping of foreign workers. The rise of terrorism in Cabo Delgado attracts protectionist policies from nearby countries, for instance, Tanzania, which is is afraid of potential spillover effects, hence discouraging the opening of borders under the AfCFTA.

Further, Africa has witnessed several coup d’etats in the past two years, especially in the western region. These include coups in Burkina Faso, Central African Republic, Mali, Sudan, Guinea and Chad.

Racial and ethnic rifts, fragile security and unstable political structures have been providing a conducive environment for military coups in West and Central African countries over the years. Coup d’etats create economic and policy unpredictability, attract sanctions and usually slow trade processes — and they tend to decrease the international and regional trade growth rate.

Xenophobic attacks have also found a home in Africa as witnessed in South Africa on more than one occasion. While several foreign nationals have so far either lost their lives or been left injured, one of the more recent fatalities was that of Elvis Nyati, 43, a Zimbabwean who was killed by the Operation Dudula mob in Diepsloot on 6 April 2022.

Xenophobic attacks on foreign nationals, or on any group of people, have serious economic and trade implications. For instance, the violence can deter international investors and foreign trading partners. It can also lead to retaliation from other major economies, for example, in 2019, South African-owned businesses operating in Nigeria were targeted in retaliation for xenophobic attacks on Nigerians working in South Africa.

Besides, xenophobic attacks adversely affect the ease of doing business in any country, and unless they are avoided, it may be difficult for intra-African trade under AfCFTA to thrive.

In addition, Democratic Republic of the Congo remains the hotspot of both interstate and intrastate conflicts. The resource-rich central African country continues to suffer from perennial friction with its neighbours, namely Uganda, Rwanda and Burundi.

These conflicts are mainly being precipitated by rebel groups from within DRC and the abovementioned states, and they include rebel groups such as the Alliance of Democratic Forces for the Liberation of Congo and M23. Between May and August 2022, the Congolese army — with a coalition of Congolese militia as well as the Democratic Forces for the Liberation of Rwanda — fought against Rwandan-backed M23 rebels in North Kivu province.

Studies undertaken by the Foreign Policy Research Institute reveal that the conflict in the DRC is a result of geopolitics, ethnic and national rivalries and competition over the country’s abundant natural resources. Military conflicts of this nature are often accompanied by the imposition of partial or total trade embargoes on the exchange of goods. Such conflicts usually reduce trade flows by raising the costs of engaging in regional and international business.

In light of the above, it is difficult to imagine the successful implementation of the AfCFTA without first achieving peace on the continent.

Peace and security mechanisms
More should be done to scale up the efforts of the African Union and its various conflict resolution, peace and security mechanisms towards attaining a peaceful and secure environment where the AfCFTA is more likely to flourish.

While the Agenda 2063 flagship initiative of “silencing the guns by 2020” suggests that the AU is alive to the integral role peace and security play in attaining the aspirations of the agenda, failure to meet the target suggests a lack of adequate political will on the part of the leadership. Perhaps it is time this gap be bridged, given the enormous potential locked in the AfCFTA.

The AfCFTA is one of 15 flagship programmes of the African Union’s Agenda 2063, whose vision is to create an Africa that is integrated, peaceful and prosperous by 2063.

The agreement seeks to bolster intra-African trade by eliminating and reducing tariff and non-tariff barriers that have long been undermining trade between African countries.

The World Bank points out that the AfCFTA promises broader and deeper economic integration and would attract investment, boost trade, provide better jobs, reduce poverty and increase shared prosperity in Africa.

Sublime as the goals and objectives of the AfCFTA may be, it is inconceivable how they will be attained in a conflict-ridden environment characterised by perennial coups, terrorist attacks, inter- and intrastate conflicts and xenophobic attacks.

The AU and the AfCFTA Secretariat must come to a full realisation that they must first seek peace, and all other things they seek thereafter shall be added to them.

 source: Daily Maverick