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The Road to the Continental Free Trade Area is Far From Easy


Goodluck Ebele Jonathan. 2012. The Road to the Continental Free Trade Area is Far From Easy. GREAT Insights, Volume 1, Issue 1. January-February 2012. Maastricht: ECDPM

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One year ago, our Assembly met in Addis Ababa on the theme: “Shared Values Towards Greater Unity and Integration”. This current Summit on “Boosting Intra-African Trade”, underscores the imperative of shared values as the bedrock for achieving integration. Our commitment as individual Member States, as Regional Economic Communities (RECs) and as a united continental body, to realize this objective for the good of all must not waver. Africa’s economic development will be more difficult to achieve without a free intra-African economic and trading system. This will, in turn, increase its underdevelopment and marginalization.

Therefore, we all appreciate the need for Africa to build a formidable mechanism for internal trade and economic resilience to protect the continent’s economies from external shocks.

The Lagos Plan of Action, the Abuja Treaty, and the NEPAD Charter, among other instruments on Africa’s economic integration and development, adequately address how to make Africa economically independent and self-sustaining.

It is against the backdrop of these frameworks, that I would like to share our experience in West Africa regarding economic integration. I should emphasize in this regard, that the key to enhancing intra-African trade is the free movement of people, goods and services. In the 37 years since the formation of ECOWAS, we have witnessed increased access of our diverse products to larger markets and greater access to larger labour work-force. Furthermore, it has encouraged our producers to produce more efficiently based on factors of comparative advantage, specialization and increased competitiveness. Indeed, it has created wider variety for consumers thus impacting on prices and ensuring economic stabilization.

Added to these specific economic gains, is the socio-political solidarity that has accrued amongst us in the sub-region which cannot be quantified. Our sustained trading contacts have, overtime, also helped to bridge our socio-cultural differences and lent our countries to harmonious co-existence. These and other advantages, I believe, justify the need for consensus here today on the priorities we must pursue, as well as the measures required, to achieve the goal of an African common market.

The projected modest growth of Africa’s GDP to 5% of global GDP by 2020 is anything but assured, given the frequent and sometimes persistent international economic and financial crises. Consequently, the necessity for an Action Plan to launch a Continental Free Trade Area (CFTA), in line with the framework and stages outlined in the Abuja Treaty, remains unassailable.

My optimism notwithstanding, I should caution against rigidity on a Continental Free Trade Area. Our experience with setting free trade targets in West Africa, leads us to believe that the multi-faceted benefits of a Continental Free Trade Area cannot be achieved without adequate infrastructure policy, legal, socio-political and cross-border security frameworks.

Of equal importance, is the need for guaranteed and predictable sources of funding for the implementation of projects. Indeed, our best efforts can bear very little fruit unless there is partnership between the public and the private sectors at the international, continental and national levels.

I should add at this juncture, that a favorable international environment is also needed to complement our domestic efforts. In this regard, I wish to call for greater political will and commitment to conclude the Doha trade negotiations to enable Africa benefit meaningfully from trade as the engine for development. Other measures must include granting Africa greater voice, representation and participation in decision making in international financial and development institutions. Besides, there is need for consistency, coherence and transparency in dealings with Africa.

These lessons from our regional perspective are essential and germane for building a viable, fair and trouble-free Continental Free Trade Area. Above all, the total package of institutional and systemic enablers must all be in place. These include the provision of adequate infrastructure, policy and regulatory frameworks, conducive social, political and economic environment, financial services and support to businessmen and women, locally and across borders. If addressed, these measures will assist in reducing the anticipated adjustment costs, as well as put less pressure on the compensatory system and ensure a cost-effective governance architecture for the Continental Free Trade Area.

It is beyond doubt that our regional economic communities provide the best platform for accelerating and achieving economic integration. Therefore, what is required of us is to do more to implement the several initiatives that we have already adopted aimed at addressing factors such as infrastructure, productive capacity and science and technology that inhibit integration efforts. In this regard, I would like to reiterate the view I expressed last October at the Commonwealth Business Forum in Perth, Australia, where I said, “There is need to have a clearer basis for trans-boundary cooperation to manage common resources like water and energy and to enable the erection of regional infrastructure that will power intra-Africa trade which is currently at only 10% of total trade in the continent”.

In the final analysis, my assessment of the progress towards the Continental Free Trade Area does not lead me to believe that 2017 is a realistic target for its take-off. Several of the key enablers that I have already enumerated, not to mention other challenges and constraints, remain lacking. For this reason, I am not convinced that by 2017 these challenges would be overcome to enable the smooth take-off of a trade regime that caters to the needs of all our countries and RECs.

For the time being, in our words and deeds, we can and must do more, to realize the objectives of the Programme for Infrastructural Development in Africa (PIDA), the Accelerated Industrial Development of Africa (AIDA) Initiative, African Productive Capacity Initiative (APCI), as well as the Action Plan for Development of Science and Technology, among others. It is by implementing these plans that we can hasten the emplacement of a Continental Free Trade Area that would stand the test of time and deliver on its promise.

I would like to recommend that the proposed CFTA Action Plan and its programmed cluster of activities be regarded by the Assembly as guidelines to address the identified challenges and constraints. The launching of the Continental Free Trade Area should follow at an appropriate and more realistic time. Now is the time for the Assembly to give consideration to a multi-speed development of the CFTA to allow States to join at a pace that best suits their needs. After all, in both the common markets of the European Community (EC) and Association of South East Asian Nations (ASEAN), members were not required to all join at the same time.

The road to Continental Free Trade Area is far from easy. Member States need to work on all convergence and fiscal issues including infrastructure, trade policy, border security, Customs, travel visas/migration, investments, and judicial governance among others. We are still grappling with these issues in the entire ECOWAS sub-region.

Taking a gradual, but incremental step toward a CFTA, would accord with the values of democracy that we espouse across the continent. It will be difficult in some of our domains, to accede to the CFTA without first involving our citizens and other stakeholders in frank and open discussions to reach consensus on strategic national public policy interests. We must be open to sharing experiences and learning useful lessons. There are no quick-fixes to integration.

Goodluck Ebele Jonathan, GCFR, President, Federal Republic of Nigeria

Extracts from Goodluck Jonathan’s Speech delivered at the African Union Summit (shortened by ECDPM)

This article was published in GREAT Insights Volume 1, Issue 1

Economic recovery and transformationEconomic Community Of West African States (ECOWAS)TradeAfrica

External authors

Goodluck Ebele Jonathan, President of Nigeria