Let’s Move Africa

Painful though it is to say, our continent is being needlessly held back. According to UN figures, the share of intra-continental trade in Africa’s over the past decade was only about 11%. Sadly, many of the regional integration plans we envisaged for a host of reasons never effectively took off. Neither the 1980 « Lagos Plan of Action » – which imagined the division of Africa into five regional economies – nor the 1991 Abuja Treaty, which proposed to implement a single currency across Africa by 2028, can be honestly qualified as “successes”.

In 2012 a decision was made to establish a Continental Free Trade Area by 2017. To get there, African leaders have first agreed to create the Tripartite Free Trade Area (TFTA), the continent’s largest free-trade zone, covering 26 countries in an area from Cape Town to Cairo. To make sure that these latest ambitious agreements don’t fall into oblivion, we need to muster a collective political will. Our institutions are not strong enough to implement plans from a purely technical approach. A country’s strategy has to be grounded on a social contract and political reality, so that people feel they have a stake in it.

Because a continent that does not trade with itself risks being stuck for the decades to come. Africa won’t be able to take off economically. The lost benefits and actual losses created by this situation are putting our future in peril. Why? Because besides the usual advantages to trade – such as the better allocation of resources that comes with the free movement of goods and people, the specialization of countries around their competitive advantages and the creation of single markets so firms can have unimpeded access to hundreds of millions of consumers – Africa could experiment free trade with itself before being exposed to international competition.

The continent is plagued by poor and under-developed transportation infrastructure, limiting accessibility to consumers, hampering intra-regional trade and driving up import and export costs. And as long as Africa is stationary, you can just as well forget industrialisation or economic diversification. The competitiveness of our industries is directly affected by Africa’s transport and logistics infrastructure challenges. One car manufacturer for instance informed they charter Airbus aircraft to move vehicles from Johannesburg to Nairobi. Another manufacturer in the soda industry says it is easier and cheaper to buy passion fruit from China, move it to Kenya, bottle it and sell it in Kenya, than it is to buy directly from next-door Uganda.

Needless barriers to trade and the free movement of people are the plague of Africa. Intra-African trade remains too low, accounting for only 10 to 12% of total trade on the continent, compared with 40% for North America and 60% for Western Europe. Even though progress has been made, it is staggering that an African entrepreneur cannot move freely across the continent. A few countries are setting the way forward such as Rwanda, a country anyone from an African country can enter without needing a visa. And before we set up functioning regional economic communities, one-stop border posts could do unprecedented good to the facilitation of movement inside Africa.

To reap the economic benefit from international trade, it is critical that we facilitate intra-regional trade with comprehensive corridor development. Current estimates indicate that trade volumes in sub-Saharan Africa will more than triple from 102.6 million tons in 2009 to 384.0 million tons in 2030, but only if trade corridors are completed.

Indeed, regional integration remains key to narrowing the gap between the continent’s promises and its reality. According to the World Economic Forum, the potential gains from increased regional integration in Africa are substantial: almost half of Africa’s 54 countries have a population of less than 10 million, and more than a third are landlocked, making it the most fragmented continent in the world. Thus policymakers need to understand that in many development sectors, the optimal solutions are regional.

Indeed, African governments and regional economic communities will need to pursue a deeper engagement with the private sector on developing transport and logistics-related projects. Which is why I have championed MoveAfrica, an initiative whose mission is to bring both private and public sector representatives together and work towards driving down transport costs across Africa. Under the banner of the NEPAD Agency of the African Union, MoveAfrica is launching in May on the margins of the World Economic Forum taking place in Kigali, Rwanda.

MoveAfrica aims to completely overhaul the way trans-boundary transports and logistics work in Africa, building on the commitments outlined during the last African Union Summit. We can’t start imagining just how much good this would do to our continent. For instance, the World Bank agrees that we could easily end hunger if only farmers were able to get produce across borders instead of seeing them rot where they cannot be sold. We could also tackle youth unemployment by easing the mobility of the young. Not to mention the many entrepreneurs waiting in the wings that would start businesses if only they had a large enough market to cater to.

Unlocking Africa’s true economic potential is a monumental task – so let’s get moving.Source :The Worldpost