The Africa’s new free trade area is promising, yet poised to face implementation hurdles in light of global geopolitical developments. The implementation of the African Continental Free Trade Area (AfCFTA) agreement will make the African continental market the largest free trade area in the world – bringing together 54 nations of some 1.2 billion people and with a combined GDP of over US$3 trillion. As the implementation date (1 July 2020) draws closer, the global markets are currently disrupted by the outbreak of Covid-19, which was declared by the World Health Organisation on March 11 as a global pandemic. Subsequently, most countries around the world, Namibia included, have since instituted travel restrictions. This is having a ripple effect on almost all aspects of human engagements mostly trade, finance, travel and employment.
Although the African continent has not been affected to a same extent as other continents such as Europe and the USA by the pandemic, the surge in the number of reported cases in Africa within the past few weeks resulted in many African countries taking proactive steps to prevent the spread of the virus within their borders. Against this background, this article will be discussing the implications of Covid-19 on the implementation of the AfCFTA should the pandemic still persist.
In 2018 African states agreed to sign the AfCFTA Agreement with the main objective to allow for the free movement of persons, capital, goods and services between the countries making up the African economic bloc. However, the benefits of the AfCFTA agreement which among others include a larger market, more jobs, and an improved supply chain, that are to accrue from the implementation of the AfCFTA will only be made possible subject to effecting the required policies and laws to spur local productivity. The implementation capacity will further be constraint by the already cross border challenges that continues to hamper Africa intra-trade bureaucracy, poor infrastructure, persistent non-tariff barriers and other protectionist measures. This will further be compounded by cross border barriers associated with the outbreak of the Covid-19 pandemic.
The recent upsurge observed in African countries with Namibia having recorded 16 confirmed positive cases as on April 5, the extent of the effect of the pandemic on global trade means that Covid-19 is a factor worthy of consideration when discussing the implementation of the AfCFTA especially in the event of the likely possibility that the pandemic and its effects persist post the expected date of take-off of AfCFTA which is set for 1 July 2020.
At the core of the AfCFTA’s objectives is the free movement of people, goods and services within the continent. Transportation is by no doubt an essential factor as far as the free movement of goods and services and persons is concerned. Meanwhile, most southern African countries such Namibia, Angola, Botswana and South Africa have declared the outbreak of Covid-19 as a state of emergencies followed by institution of heath measures such as total or partial lockdown on travel and movement of people with an exception of the supply of essential services such as medical supplies and emergency supplies. This is in addition to the fact that factories, offices, maul, schools, movie theatres, museums, gyms (and basically anywhere there could be a gathering of people) may most likely be restricted. In Namibia, the above is provided for in the state of emergency - Covid-19 regulations.
Factories are important to the implementation of the AfCFTA. Covid-19 implies that African countries may prioritise the manufacture of medical supplies and essential goods over other non-essential goods and the factories which manufacture those non-essential goods may most likely remain restricted until Covid-19 is declared “contained”. This may adversely impact the intercontinental trade of goods that are not medical supplies and essential services.
For many in Africa such as in Namibia were a vast number of the population survives by earning daily wages and have little or no savings, the lock down has adversely affected their finances and their lives. Small businesses such as kapana vendors and shebeens are hardest hit. Some governments such as Namibia and Botswana have however put in place emergency interventions and incentives to dampen the economic impact of Covid-19.
In essence, the requirements for a successful containment of Covid-19 by African countries means that if the pandemic were to still persist by 1 July, 2020, the take-off date for trading under the AfCFTA may inevitably be postponed or suspended until further notice.
This is because containing the virus may entail a restriction on international trade contrary to the principles of the AfCFTA Agreement. African countries however, have the option of concentrating more on manufacturing and trading in essential and medical goods and thereby creating a market for these if Covid-19 still persists by 1 July 2020.
In pulling it all together, although the AfCFTA, if successfully implemented will be Africa’s solution to a rising debt profile, increase in inflation and massive unemployment, the obvious hurdle facing the implementation of the treaty is failure to ratify the treaty appears minuscule when compared to the fact that Covid-19 will necessitate African countries albeit involuntarily to adopt or rather, continue their protectionist policies of trade.
Lastly with the AfCFTA plans thrown a little of track, African policy makers need be laser focused to quickly right the ship once the Covid-19 menace end. Efforts to make Africa trade more with itself to realise the benefits of the AfCFTA should be continued!
*Johannes Pendapala Uusiku is a Law Lecturer at the University of Namibia. These are his personal views.
2020-04-09 11:24:10 | 4 months ago