Is the ideal of African unity a dream or a nightmare?
The African Continental Free Trade Area could spell success, but it's doubtful we will all be one big happy family
I’m not yet convinced about African unity.
It does have its virtues though, no doubt. Imagine Africa taking its rightful place at the table of the economic powerhouses that decide the future of all things big. We’d rank third, just after China and India, and we’d be bigger than the US, Brazil, Russia and all the rest.
At first glance it seems the obvious thing to do, if we can get our act together and actually implement the ideological dream.
Economies of scale would lower the cost of the continent’s products and increase our ability to compete in global markets, obviously.
Taking down all of the borders and letting people wander everywhere would be a brave step. I’d like to see one of those time-lapse pictorials of the population migration between now and, say, 2050.Would Lagos still be the biggest city (by population) in Africa? Probably, but they’re not signing up to the African Continental Free Trade Area, just yet, if ever.
Would more people migrate to Cairo or Cape Town? I think they’d come here. Wherever they end up, we should prepare for urbanisation on a scale never seen here before.
Intra-Africa trade would be unleashed. No more physical borders, no more regulatory mazes to muddle thorough, less middle-man economic leakage, no tariffs and no more 55-odd volatile currencies to worry about.
Heaven. Or chaos?
Knowing our boundaries
The efficacy of any proposed ecosystem has to be tested at its boundaries. We’d have to imagine what the best and the worst outcomes could be, to search for an acceptable middle, where it might settle, to see whether it’s worth the risk.
If ever there was a case of scrambling of eggs that cannot be unscrambled, Africa without boundaries is it.In March 2018, 44 out of 55 African countries signed the ACFTA agreement, which will come into effect once the various parliaments have ratified it, which is expected to be all done by the end of June.
SA signed up. Nigeria didn’t.
Inside Nigeria is the city of Lagos, which sets itself apart on practically any economic metric as the outperforming, growing, exporting, best-in-class city of Nigeria, if not Africa. In that focused environment, where the government and the private sector have become close allies, Lagos is able to secure capital for huge industrial undertakings.
Maybe the local, focused, policy-assisted success story that is Lagos had something to do with Nigeria not feeling the need to sign up?
ACFTA may create a few Lagoses, and maybe Johannesburg will be one of them? I certainly hope so. But there will be issues to manage and control. Big issues, for us, for SA.With Nigeria out, would SA be to the AU what Germany is to the EU? I’m not sure we’d want to be. Would we, for instance, have to finance our intra-Africa partners to buy our goods?
Are we more interested in trading among ourselves, or gathering our resources and resourcefulness to become a formidable exporter, as a continent? I’d come down on the side of attracting international capital (into Africa) to build massive-scale capital projects so that we can export, export, and export.
Planned and managed properly, the ACFTA initiative could reach its highest common factors of success, but there are lowest common denominators we must watch out for.
Inequality and the costs
Will the anticipated economic growth that ACFTA promises outweigh the cost of the infrastructure build needed to cope with the influx, and still keep pace with our own infrastructure and transformation goals?
South Africa needs to address economic inequality, there’s no debate on that. The focus is on how to fund it. Ultimately, we need foreign direct investment into local natural advantage projects, to drive local socio-economic agendas.
Unemployment. How will we deal with that? How will we define the boundaries (if any) for social welfare, beyond the borders of the sovereign state, beyond “our people”?Perhaps I don’t grasp the full extent of the unity that ACFTA anticipates; perhaps we’ll just be one happy family. I doubt it.
Economics is the foundation of prosperity, and its promise is the founding manifesto of political strength and influence. If indeed we do go “all the way”, who will be in charge?
Despite and beyond these doubts, though, ACFTA is an invitation for all of us in Africa to start thinking and planning together. The economic powers that have sought to do business in Africa have, up to now, had the upper hand (to be kind).
Mark Barnes is CEO of the Post Office.