Africa’s big start toward freedom from poverty

A free-trade pact for the continent has come into force with nearly half of countries onboard. By one forecast, this is the best path to prosperity and security.

Reuters
An employee serves a customer inside a mobile phone care center Kenya's capital Nairobi.

More than a third of Africa’s 1.2 billion people have lately considered emigrating, according to a poll. Many of them eye Europe as the desired destination. The reasons are not hard to find. Africa is home to 28 of the world’s poorest countries. Half of its residents live in poverty. Yet of all the solutions being tried to end Africa’s woes and keep its people from leaving, is there one that stands out? 

Yes, says scholar Jakkie Cillers, head of South Africa’s Institute for Security Studies. He has crunched the numbers on 11 possible pathways to prosperity in Africa, such as a leap in education, a surge in democracy, and an end to violent conflict. Under his forecast, the greatest impact would be a free-trade zone across the continent’s 55 countries. By 2050 such a European Union-style zone could reduce poverty more than the other steps. (In second place would be a revolution in agriculture.)

His calculations are well timed. On Thursday, an agreement to set up an African Continental Free Trade Area came into force. Nearly half of the countries, or 24, have ratified it, which means they will now negotiate the details of implementing it. Another 27 have only signed it, perhaps waiting to see how it plays out. Nigeria, the second largest economy, has hinted it will join.

While removing trade barriers or ending revenue from customs taxes will not be easy, the agreement’s potential is huge. It could create the world’s largest free-trade zone, not only in population but in combined gross domestic product.

At a time when Britain may leave the EU and President Donald Trump is putting up protectionist tariffs against many countries, Africa is rushing in the opposite direction, toward more inclusion and a sense of belonging.

One good reason is that African leaders see increased trade among their countries as a way to curb security threats, such as terrorism and civil wars. By 2050, Africa will have more young people than India or China. If they are unemployed, as a great number are now, they could be fertile ground for those inciting conflict.

The new pact has far to go. Only 15% of trade in Africa is between countries. By contrast, trade within the EU is 67%. Africa also has large distances, rough terrain, and low-quality infrastructure. It has relied too long on exports of mineral resources to other parts of the world as well as on foreign aid. Manufacturing makes up only 9% of Africa’s economy.

One immediate effect of the pact is that it sends a signal that Africa can unify around a common future. Such a shift in attitude will be welcomed by investors. A future that includes a free-trade zone from Cairo to Cape Town speaks of a level of trust and cooperation – something needed in other parts of the world.

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