A regional symposium convened by the SADC Parliamentary Forum (SADC PF) for SADC parliaments last week has revealed pitfalls on the road towards full realisation of the Africa Continental Free Trade Area (AfCFTA) and galvanised parliamentary action as the region angles for rich pickings from the colossal trade agreement.
The AfCFTA Agreement was signed in 2018. It came into force in January this year. Its newly-appointed Secretary General, South African Wamkele Mene, said with a membership of 55 countries, the AfCFTA is poised to be “the largest Free Trade Area (FTA) in the world in terms of membership, covering a market of 1.3 billion people with a combined Gross Domestic Product (GDP) of US$3.4 trillion,” according to projections made in 2020.
“The overall objective of the AfCFTA is to create a single continental market for goods and services, with free movement of business persons and investments, paving the way for accelerating the establishment of the Continent’s first ever Customs Union,” Mene explained.
At the start of its virtual 49th Plenary Assembly Session which drew the participation of 13 national parliaments from the SADC Region on June 25, 2021, the SADC PF convened the symposium under the theme: “Leveraging the AfCFTA for Post-Covid Economic Recovery in Southern Africa: The Role of SADC Parliamentary Forum and National Parliaments”.
Botswana’s Minister of Investment, Trade and Industry Mmusi Kgafela moderated the symposium. Mene; Dr Khutula Sibanda, Director Industrial Development and Trade at SADC (who represented SADC Executive Secretary Dr Stergomena Lawrence Tax); Mr Phazha Butale, Chief Negotiator in Botswana’s Ministry of Investment, Trade and Industry; and Ms Paulina Mbala Elago, Executive Secretary for the Southern Africa Customs Union (SACU) made presentations.
In opening remarks, Kgafela hailed the AfCFTA.
“The AfCFTA is anticipated to be a vehicle for Africa’s economic transformation through facilitation of movement of goods and services, competition, investment and intellectual property,” he said.
He added: “The immediate benefits of the AfCFTA are expected to come from a reduction in tariffs/duties, elimination of Non-Tariff Barriers (NTBs) and cutting red tape by simplifying customs procedures.”
However, he warned that the AfCFTA would not work for the continent by default and called for active involvement of the Regional Economic Communities (RECs) including SADC and the region’s parliamentarians.
“The impact of the AfCFTA will depend not only on what is agreed in the negotiations, but also on whether African countries domesticate, implement, and comply with the provisions of the AfCFTA Agreement,” he said.
On the role of SADC PF, Kgafela said it would include “advocating for inclusion of the AfCFTA implementation in national laws, National Development Plans and all other legislation existing in the country… awareness raising and amplifying citizen’s voices in the AfCFTA processes”.
While acknowledging that the AfCFTA presents wonderful potential benefits that include a possible industrial boom and more jobs, Sibanda flagged challenges that he said could make or break the FTA.
These include Intra Africa Trade which is deemed low at about 19 percent; low levels of export diversification, itself a symptom of weak value chains; poor connectivity infrastructure; low macroeconomic integration convergence; weak participation of Small to Medium Enterprises (SMEs); and low gender parity.
“The success of the Continental Free Trade will, therefore, largely depend on the extent to which the above challenges are going to be addressed,” Sibanda warned but said industrialization would likely stand the continent in good stead.
To that end, he urged SADC parliamentarians to familiarize themselves with and support the SADC Industrialization Strategy and Roadmap of 2015-2063, “which seeks to achieve economic and technological transformation in the region, through among others, promotion of investments, and partnership with the private sector”.
On infrastructure, Sibanda said the SADC Regional Infrastructure Investment Master Plan was being implemented to facilitate the design and construction of critical infrastructure projects within the SADC region covering the transport sector, energy, Information Communication Technology (ICT) and water, among others.
On his part, Butale described the AfCFTA as the “fastest ratified agreement in the history of African Union”. Although Botswana had not ratified the Agreement, she had submitted an initial offer on trade and services covering five priority areas: communications, transport, tourism, financial services and professional services.
He urged SADC and other RECs to create a conducive environment for the AfCFTA to succeed.
“You need the correct infrastructure, a developed industrial base to manufacture finished products and an integrated market,” he said.
Butale said developing industry and creating value chains on the continent would reduce unemployment which has afflicted mostly women and the youth.
He suggested simplifying and agreeing to customs procedures which are predictable, transparent and harmonized across borders to make it easier for traders to move cargo from one part of the continent to the other.
Turning to the pharmaceutical industry, he said COVID-19 had exposed gaps within Africa and exhorted MPs to join the fight against the “monopolistic and protectionist patent laws” to facilitate production of generic medicines.
SACU’s Elago also welcomed the AfCFTA and said it could significantly alter the African status quo of low intra-trade.
“The AfCFTA is a timely policy imperative and although it is not a panacea, it can be a serious game-changer,” Elago said, adding that it was aligned with the objective of SACU of deepening regional integration and industrialization. She said the Free Trade Area also offered opportunities for enhanced trade.
Although the SACU Agreement did not include trade in services, Elago called for investment in the sector. She explained that SACU had adopted industrialization as an over-arching objective with focus on regional value chains, export promotion and investment, trade facilitation and logistics.
She expounded that SACU had identified priority sectors that include agro processing with focus on leather and leather products, fruits and vegetables, meat and meat products, textile and clothing, pharmaceuticals and chemicals.
With COVID-19 still raging, Elago said it was imperative that Africa becomes “self-sufficient” in the pharmaceutical sector and welcomed the African Development Bank’s decision to support Africa’s pharmaceutical industry.
She encouraged SADC parliaments under the SADC PF to among others expedite ratification and domestication of the AfCFTA Agreement, address skills development while ensuring a conducive environment for cross-border trade support towards Small to Medium Enterprises (SMEs), women and the youth.
An (MP) from Mozambique, Carlos Moreira Vasco, said some COVID-19 related measures imposed by some countries to contain the pandemic were posing “severe obstacles towards the full operationalization of the goal of a single portal of circulation of goods and services and investments on the continent”.
Vasco said Mozambique had initiated a study on the impact of ratifying and implementing the AfCFTA on its economy before ratifying but was committed to the Agreement.
“We need to combine our efforts and exchange good legislative practices at national level and at the level of SADC PF to make the Free Trade Area a success,” he said.
While pledging Mozambique’s commitment to the AfCFTA, Vasco called for laws that would “facilitate a successful implementation of the AfCFTA as well as policies that will allow innovation and digitalisation”.
The Speaker of the Parliament of Zimbabwe, Advocate Jacob Francis Mudenda, said his country had ratified the AfCFTA Agreement but said COVID-19 had to be defeated if its implementation was to be successful.
“We cannot implement the AfCFTA if Africa is sick and suffering from COVID-19,” he said. He challenged the Centre for Disease Control (CDC) in Africa to expedite research on COVID-19 and “come up with our own brand of vaccine rather than crying for patents from other countries”.
Mudenda called, also, for development of Africa’s indigenous medicines “that are being used quietly but are not being investigated for their efficacy”.
He continued: “That research must be buttressed by our universities which are currently sleeping and yet we have so much intellectual power in Africa. Our universities must wake up and come up with research to fight not only COVID-19, but other diseases.”
Mudenda advocated for legal reforms and harmonisation and argued that the AfCFTA could not succeed in an environment replete with “disjointed” laws.
“Our customs and immigration laws need to be harmonized so that there is free movement of goods and services within the continent,” he said.
He said roads and railway systems should be developed and harmonised while ports are modernised to cope with increased movement of goods and services.
He was particularly scathing about the continent’s air services which he said needed to be improved in terms of connectivity.
“Currently to visit some African countries, you have to go via Europe. This is a shame!” he said.
Mudenda urged Africa to embrace the “Fourth Industrial Revolution” and suggested the continent’s universities conduct research on improved technologies especially on the digital aspect.
On enabling resources, he advocated for “an African martial plan” so that countries pool resources together instead of relying on external funding.
“The African Development Bank needs to wake up and lead accordingly,” he said.
Additionally, Mudenda rallied for “thought leadership that is innovative and courageous to take decisions” that can sometimes appear painful but produce beneficial results in the long-term.
Botswana lawmaker Dumelang Saleshando encouraged all African member states to ratify and domesticate the AfCFTA Agreement.
He said: “It’s critical for us to move together. If we are going to break down trade barriers, it serves no purpose if one member of the chain shows less enthusiasm than the others,” he said.
Saleshando stressed the importance of monitoring and evaluation and advised the SADC PF to promote a culture of regularly discussing trade statistics.
“Figures don’t lie,” he said.
A representative of the East Africa Legislative Assembly underscored the importance of peace and security in making the AfCFTA a success.
“Without peace and security, there is no chance of trading. Peace is paramount for any development however rich you are,” she said.
Zimbabwean MP Anele Ndebele said the symposium had been an eye-opener.
“It became very clear today that the implementation of the AfCFTA has a significant potential to serve as a catalyst for Africa’s post pandemic recovery,” Ndebele said.
He added: “AfCFTA is an important vehicle for realizing the Pan-African vision of regional and economic integration and structural transformation for Africa’s economy.”