Vast new common market mooted

Vast new common market mooted for intra-African trade

Can 54 African nations overcome their mutual reserve and opportunism to forge a continent-wide free trade zone, knowing that there will be winners and losers amongst them?

Vast new common market mooted

Free Trade in Africa Main Graphic RGB


One of the major legacies of colonialism in Africa has been in the grouping of African nations, and the alignment of their transport routes, legal systems and common languages not by common sense and mutual advantage but by the power play of Europeans at the Berlin Conference of 1884-5. This has meant that visions like Cecil John Rhodes’ “Cape to Cairo” dream guides the lives of millions of Africans to this day: Africa’s regional trading blocs overwhelmingly reflect common colonial languages and economic affinities. France, as a prominent example, bound its newly-independent colonies together for the foreseeable future by the creation of common currencies for its West and Central African possessions.

Today, Africa’s great trading blocs have made great progress internally, spurred on by colonial-era transport links (down to the fact that rail gauges across the continent still follow those of the respective European powers). Yet the dream of real pan-African free trade between these blocs remains somewhat distant. However, a decisive leap forward has been mooted by 26 African nations. A free trade area (FTA), comprising more than 530 million people, has been proposed for the (often overlapping) members of the South African Development Community (SADC), the Common Market for East and Southern Africa (COMESA) and the East African Community (EAC). Negotiations begun in 2011 are now gathering pace, and there is reason to hope that South Africa, which belongs to all three groupings, might find itself in a free trade area the size of

The gains of a common market would be immediate, and would accrue to governments, the private sector, and the public. However, the losses would be highly concentrated among an influential elite: those who currently profit from high customs tariffs and barriers to trade, including the many state-owned firms who seldom have to fend off foreign competition for their goods and services.

The fact that the winners from free trade are numerous, and that each of them gains only a little (although the total gain is large), and that the losers of free trade are few, but their losses are highly concentrated, explains why in the fifty or so years since African countries became free, trade remains largely unfree. Simply put, it is easier for inefficient firms – and Africa, particularly formerly socialist Africa, has produced many who are with us today – to bribe the state to keep out their foreign competitors than it is to become competitive themselves. Small countries like Lesotho, Swaziland, Togo and The Gambia who derive a substantial portion of their earnings from customs fees and who have carved out small economic niches through preferential tariffs could face a partial collapse of revenue.

In time, however, global pressures, solid growth in exports and the pressure to harmonise with WTO rulings will bring Africa towards free trade. The African Union has formally embraced the unconstrained movement of goods and services as a major policy goal for all 54 member states on the basis of the progress made by the smaller 26-nation Comesa-SADC-EAC bloc since negotiations began in 2011.

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