Martha Tchikwambi

Background 

One of the leading assignments of the African Union for the year 2063 is the African Continental Free Trade Agreement. The estimated Gross Domestic Product of Africa measures at about US$3.4 trillion from about 1.3 billion people. 

This information alone has set Africa as the next world trade centre as per the African Union agreement. As a result, this subject of a free trade area in Africa has raised interest in the contributions of various scholars.  Most of the scholars in welfare economics contribute to the subject, stating that the African Continental Free Trade Agreement, even though it is highly considered, and the interest of countries to unite is not a new agenda. 

The concept of free trade in Africa is merely an idea of the past conceptualised into the future. The idea of free trade among African countries was motivated by the colonial era, which divided the different nations and restricted trade.  The presence of colonialism and restricted trade activities led to the initiative of the Pan-African vision. This vision aimed at setting the continent free from slavery and securing the rights of the nations to self-governance.  One of the objectives of the Pan African vision was to unite Africa through trade; however, most of the countries in the continent after their independence still faced underdevelopment and hard economic conditions, which became some of the hindering factors of the promotion of free trade.  Consequently, of these events, some African countries joined forces to demand a new international Economic Order by using international platforms in international organisations. The leaders at that time requested amongst many other factors to have a right to regulate the dealings of multinationals in their countries. 

They also further requested the uplifting of trade agreements concerning developed and developing countries, such as tariff reductions that would favour less developed countries during that time. However, these acts encountered disappointments due to what was perceived as the failure of international institutions to identify solutions to the many challenges of African countries. 

With the foreign aid leading to a deadlock, most of the African leaders consented to the approval of the Lagos Plan of Action for the Economic Development of Africa at the Organisation of African Unity (OAU) conference in Lagos, Nigeria, in 1980.  The results of this action eventually led to the movement for the implementation of free trade built on the Lagos Plan when it committed to the establishment of the African Economic Community in the Abuja treaty. 

In 2002, the OAU transformed into the African Union (AU), which had similar objectives as the AOU that were, amongst many, governance towards self-sustainment development and self-reliance amongst African countries. 

Fast forward to present economic conditions, on 21 March 2018, African leaders, in conjunction with African Unions, met in Kigali, Rwanda, on the subject of free trade as an area of discussion to authorise a new trade agreement that focused on the promotion of continental unity, regional integration and deeper economic ties. 

The implementation of this agreement happened on 30 May 2018, known as the African Continental Free Trade Agreement (AfCFTA).  The key agenda of the AfCFTA is amongst many agendas to create a single market for goods and services, and enhance economic integration in the African continent.  This agenda is in accordance with the Pan-African Vision of ‘An integrated, prosperous and peaceful Africa’ as highlighted in the Agenda 2063. Thus, in brief, one would state that the AfCFTA is an agenda of agreement that has been set to promote and move the African continent to a state where trade is more amongst African countries, which would include freedom from many if not all sorts of barriers, resulting in the mobility of human capital, intellectual capacity and investment capital in the form of equipment at most. 

The Grassroots (MIEpreneurs)

Grassroots traders and MIEpreneurs are characterised as those traders who mostly frequent the market through the importing and exporting of goods from one country to the other in the informal sector of the country. 

What presumably makes these traders known is the variation of commodities that they trade; this variation mostly arrays from agriculture to manufacturing and services at some point. However, this section of the trade industry poses a challenge as to the inclusion of their contributions towards the Gross Domestic Product of their countries, as most of the traded goods are not captured in the official statistics. 

The absence of official records of these trade activities results in a misrepresentation, as these activities do pose an important contribution to society, such as the generation of income and employment. These unrecognised activities have been recorded to aid the way of life and alleviate poverty, especially towards those individuals whom the government cannot very well reach. 

The informal cross-border traders are very important because their contributions are not only in the country of origin but also to other countries, they source and contribute goods to countries of regional integration. Due to the high semi-illiterate or illiterate levels of informal cross-border traders, there is very little record keeping of their trading activities.  Moreover, in informal cross-border trade activities, women are believed to comprise 70% of the informal sector for cross-border trade activities in Africa. This also reflects the inability of women to access formal job opportunities, thus turning to alternatives of employment to support their families.  The Grassroots traders in cross-border trade are considered the blood vessel that carries oxygen to the rest of the trade organs.   Even though unrecorded, a higher percentage of trade mobility occurs at the Grassroots level, especially in less economically developed countries in Africa and Namibia is no excuse.  Constant failure to recognise and validate the contribution of these small-scale traders has led to the stagnation of growth in trade to this date.  Namibia, in its existence as a state, is not excluded from the presence of Grassroots traders, ranging from the borders of Angola, Zambia, South Africa and Zimbabwe to name but a few regional borders.  

Namibia’s role in promoting free trade

Coined by the Minister of International Relations and Cooperation, Hon. Netumbo Nandi-Ndaitwah, addressed the audience on the 13th Dr Theo-Ben Gurirab lecture series, ‘Africa beyond aid: youth defining the future today: Post Covid-19 economy and AfCFTA’, stating that the AfCFTA promises a holistic circle of greater market-driven opportunities that will in turn trigger more trade and investment.  It was also noted by the minister that this very same agreement would allow greater value-addition and productivity growth, leading to more sustained and better jobs with social inclusion, and further enlarging markets through integration.  She thus concluded by stating that the youth need to position themselves and ascertain ways in which they can make the AfCFTA work for them through the support of the government. With the provision of the above mentioned, the AfCFTA can be foreseen as a beneficial agreement that also requires hard work and commitment from each individual to reach the desired objectives.  Because, if we speak of accessibility for young entrepreneurs, the inclusion and recognition of Grassroots traders needs to be brought to light. 

The responsibility of various government bodies to implement this agreement should also come with the strategy to legalise the informal traders and recognise their efforts.  The leading cause of smuggling and illegal trade activities at border posts has been caused by unfair recognition through the legal system, which has led young entrepreneurs to look for alternative means of survival. 

With all this being said, as well as to conclude the subject, the opportunity to be an active trader in the AfCFTA is of well-pleased advantage to every African entrepreneur; however, there are setbacks from African countries themselves to mobilise trade for Grassroots traders or MIEpreneurs.  This is so because most of these traders do not form part of the formal trade records that contribute to the GDP of a given country due to failure to meet the required paperwork and registration as well as the legal system. *Martha Tchikwambi is a Business Simulations junior lecturer at NUST. She is pursuing a Master’s degree in Business Administration – Public Sector Management at the Namibia Business School.