Thread: Economic 'game changer'? African leaders launch free-trade zone

NIAMEY (Reuters) - African leaders launched a continental free-trade zone on Sunday that if successful would unite 1.3 billion people, create a $3.4 trillion economic bloc and usher in a new era of development.

After four years of talks, an agreement to form a 55-nation trade bloc was reached in March, paving the way for Sunday’s African Union summit in Niger where Ghana was announced as the host of the trade zone’s future headquarters and discussions were held on how exactly the bloc will operate.


It is hoped that the African Continental Free Trade Area (AfCFTA) - the largest since the creation of the World Trade Organization in 1994 - will help unlock Africa’s long-stymied economic potential by boosting intra-regional trade, strengthening supply chains and spreading expertise.

“The eyes of the world are turned towards Africa,” Egyptian President and African Union Chairman Abdel Fattah al-Sisi said at the summit’s opening ceremony.

“The success of the AfCFTA will be the real test to achieve the economic growth that will turn our people’s dream of welfare and quality of life into a reality,” he said.


Africa has much catching up to do: its intra-regional trade accounted for just 17% of exports in 2017 versus 59% in Asia and 69% in Europe, and Africa has missed out on the economic booms that other trade blocs have experienced in recent decades.

Economists say significant challenges remain, including poor road and rail links, large areas of unrest, excessive border bureaucracy and petty corruption that have held back growth and integration.

Members have committed to eliminate tariffs on most goods, which will increase trade in the region by 15-25% in the medium term, but this would more than double if these other issues were dealt with, according to International Monetary Fund (IMF) estimates.

The IMF in a May report described the free-trade zone as a potential “economic game changer” of the kind that has boosted growth in Europe and North America, but it added a note of caution.

“Reducing tariffs alone is not sufficient,” it said.


Africa already has an alphabet soup of competing and overlapping trade zones - ECOWAS in the west, EAC in the east, SADC in the south and COMESA in the east and south.

But only the EAC, driven mainly by Kenya, has made significant progress toward a common market in goods and services.

These regional economic communities (REC) will continue to trade among themselves as they do now. The role of AfCFTA is to liberalize trade among those member states that are not currently in the same REC, said Trudi Hartzenberg, director at Tralac, a South Africa-based trade law organization.

The zone’s potential clout received a boost on Tuesday when Nigeria, the largest economy in Africa, agreed to sign the agreement at the summit. Benin has also since agreed to join. Fifty-four of the continent’s 55 states have now signed up, but only about half of these have ratified.


One obstacle in negotiations will be the countries’ conflicting motives.

For undiversified but relatively developed economies like Nigeria, which relies heavily on oil exports, the benefits of membership will likely be smaller than others, said John Ashbourne, senior emerging markets economist at Capital Economics.

Nigerian officials have expressed concern that the country could be flooded with low-priced goods, confounding efforts to encourage moribund local manufacturing and expand farming.

In contrast, South Africa’s manufacturers, which are among the most developed in Africa, could quickly expand outside their usual export markets and into West and North Africa, giving them an advantage over manufacturers from other countries, Ashbourne said.

The presidents of both countries attended the summit.

The vast difference in countries’ economic heft is another complicating factor in negotiations.

Nigeria, Egypt and South Africa account for over 50% of Africa’s cumulative GDP, while its six sovereign island nations represent about 1%.


“It will be important to address those disparities to ensure that special and differential treatments for the least developed countries are adopted and successfully implemented,” said Landry Signe, a fellow at the Brookings Institution’s Africa Growth Initiative.

The summit also saw the launch of a digital payments system for the zone and instruments that will govern rules of origin and tariff concessions, as well as monitor and seek to eliminate non-tariff obstacles to trade, the African Union said.

https://www.reuters.com/article/us-africa-trade-idUSKCN1U20BX

Great news. Get them all further into debt, and the asset-stripping and land-grabbing can start in earnest.

^^

Yes that'll work, or maybe not because it's Africa.

Originally Posted by kmart

Great news. Get them all further into debt, and the asset-stripping and land-grabbing can start in earnest.

They only reason they are in massive debt is because they're run by a bunch of corrupt arseholes that would sell their own grandmothers.

That corruption is the biggest hindrance IMO.

That and tribalism - if you’re not in the ruling elite’s tribe you’re buggered.
Corruption and tribalism make it so easy for the West to rip them off.
Rank stupidity lends a hand occasionally too.

Originally Posted by harrybarracuda

They only reason they are in massive debt is because they're run by a bunch of corrupt arseholes that would sell their own grandmothers.

That corruption is the biggest hindrance IMO.

Yep. The only positives I can see from the globalist (IMF/WTO/WB) agenda is the counter-trade against the Chinese, who are already decimating Africa.

Originally Posted by kmart

who are already decimating Africa.

the frenchies have never left - they use their military to influence the officers who they trained so the bidding of the frenchie corps , especially TOTAL , is done

the seppos have been trying it in the ex anglo colonies and now the russians are getting in on the action

the chins just bribe their way in which is not always successful once the money has been pocketed and the plebs are getting treated like dogs by the chin bosses

When I first went to South Africa I noticed several workers building a brick fence at a house as I drove past with a local friend. I asked him why so many were needed to build a simple house fence. This was his reply. One to mix the mortar, one two hand the bricks to the bricklayer, one to supervise the bricklayer and one to make sure none of them stole the bricks.

Originally Posted by harrybarracuda

they're run by a bunch of corrupt arseholes that would sell their own grandmothers.

Only in Africa eh, no hint of such shenanigans in the "civilised" parts of the world eh?

Charlie dreams of it on a weekly basis, Camilla finds him sobbing regularly

Originally Posted by OhOh

no hint of such shenanigans in the "civilised" parts of the world eh?

Other than Russia and China, not much.

Originally Posted by OhOh

Only in Africa eh, no hint of such shenanigans in the "civilised" parts of the world eh?

Charlie dreams of it on a weekly basis, Camilla finds him sobbing regularly

I must admit, even for you "What about Prince Charles and Camilla" takes your stupid waffling to new extremes.

One has to wonder, why they are not so hard-working, efficient, clever, ingenious, incorrupt, you name it - like we in the old good world?

^

I see there is more troubles brewing with a war breaking out between the french speakers and the English speakers in Canadaroon.

Successful nations = educated, not soaked in corruption, no tribalism
Cameroon = none of the above.

With this economic game changer one could expect that Sub saharan Africa will within 20 years go from the poorest region in the world to the... welll...poorest region in the world.

Those Emperor Penguins in Antarctica are doing it pretty tough I’ve heard.
Still, sitting on an egg while blizzards rage for months is probably a dream lifestyle for some Africans.

[QUOTE=OhOh;3973925

One in particular has brought 93% of it's own population out of "poverty", can their methods be rolled out elsewhere?
[/QUOTE]

It's their methods elsewhere - pillaging natural resources and destroying local economies - that has lined a few pockets back home.

You silly, snivelling sycophant.