The AfCFTA.  Can it co-exist with China?

Published:July 18,2022

By: Mweusi Karake

The African Continental Free Trade Area (AfCFTA), which officially came into place on 1^st January 2021, will if well implemented; be one of the largest trading blocs in the world. 

I am aware that my usage of “if” sounds pessimist, but as they say “once bitten twice shy”. I grew up in East Africa when East African countries were among the most integrated on the continent. I can vividly remember the East Africa Shilling, when I was a little boy. And as I grew older and was in high school, my two most important qualifications then, were: The EastAfrican Certificate of Education and East African Advanced Certificate of Education. Both supplied by The East African Examination Council. 

So originally a student in Kenya, Uganda and Tanzania studied the same syllabuses and got the same qualification that could take one into any of East African greatest academic institutions, Makerere University ( the oldest), Nairobi and Dar es Salaam Universities. No need to get “equivalents”.

I can vividly remember East African Customs and exercise, a de facto customs Union, I can remember the East African Railways and Harbors, I remember East African post and telecommunication, I remember East African Airways and so on and so forth. I also remember when everything came crumbling on our face. So the East African Community has spentdecades trying to rebuild what politicians destroyed in 70s. And this is neither an isolated case of when Regional groupings in Africa and beyond have been destroyed by poor political ambitions and or decisions. Look at the European Union! Brexit will certainly spill over. Look at what is happening to The North American Free Trade Agreement (NAFTA), 30 to 40 years from now, young people in Europe and North America will be writing with regret and sadness similarto what I am expressing today. It takes a few politicians who put their political ambitions ahead of that of their communities to derail a noble cause. So the future of AfCFTA can only be looked at in the mirror of other regional integrations ambitions that came before it.

Fortunately, the architect of the AfCTA, though not asblunt as I am, seem to know the challenges that lay ahead. In theory, the majority of African countries are now operating under its preferential trade framework,since the aforementioned January 1. Nevertheless, they have given themselves a long time frame instead of popping champagnes, and say hooray! Instead its liberalized trade regime will, hopefully; gradually lead to an integrated continental market with tariffs phased out on 97% of tariff lines within 10-13 year. This means we expect a fully-fledged AfCTA, between the year 2031 and 2034.

So where does China come in?

China is today the single biggest trading partner with African countries. Geographically, China might be smaller that Africa, Europe or North America. But in terms of population, it’s the most populous nation of 1.3billion people almost the same population as the African continent. So in a way China is by its own right a continent.

Secondly, by the time the ACFTA, is implemented assuming all goes by the right schedule, 2031- 2034, China, which today the 2^nd largest economy in the world will by then be the biggest economy in the world. Africa will not be the biggest economy in the world, but it will be the biggest market.

Now African countries want to trade more with each other on the continent, and questions have been asked; will this hurt or benefit big trading partners like China?

Chinese officials have publically said that, China is wholly supportive of the AfCFTA, seeing it as a ‘win-win’ solution and arguing that free trade and multilateralism are key foundations to the global system. In November 2020, China’s foreign minister Wang Yi assured African that his government willprovide cash assistance and capacity-building training to AfCFTA secretariat”.

Africa’s traditional trading destination.

Africa export and import patterns have in past been dictated by their former colonial masters, religious and other western historical links. China is a new entrant in this mix and has no historical baggage in Africa.

So let us face the facts; it is not likely that Europe, major colonial powers and Christianity exporters to Africa, nor North America, a successor to European Influence in Africa are going to applaud ACFTA. It is like children’s seesaw, one can only go up when one goes down and vice versa. The higher Africa goes upthe lower the west goes down. On the other hand China and Africa, at least for the moment, don’t have to be on the seesaw.

What will be the linkage  between the intra-Africa CFTA and China?

The focus on intra-African links is expected to involve China in two main areas: trade and the building of infrastructure to facilitate trade.

Infrastructure

As I have indicated in my past writings, AfCFTA is not going to be implemented by White color business people. The men in suits and neck ties, and the women in high heels, flying in Boeing and Airbuses.  It will only be successful through young men in jeans, truck suits and women in Kitenges. These will require adequate roads and railway. Infrastructure; which will be necessary for the implementation the reduction; and latter total removal of tariff and non-tariff barriers. The former colonial masters did not build these roads and railways for the purpose of intra African trade. Thebuilt a few and they are not about to do so today. Particularly, the western so called “democratic models”, will not facilitate that. Neither Democrats norRepublican will win votes by promising to build Infrastructure in Africa, the same goes for Europepolitical parties. On the other hand, china is already dealing with Africa on infrastructure development under the Forum for Africa Cooperation (FOCAC). 

China is already the highest investor in African infrastructure, and so Beijing is un-doubted going toplay a key role in projects to set up transport corridors that will support African, intra African trade, and industrialization. This is already happening through “The Belt and Road Initiative” (BRI) framework. Africans are not naïve, they don’t see China as a God sent messiah, China has its own interests, what we shall be looking for is a Win –Win partnership.

Potential for trade partnership instead of tensions

The AfCFTA is designed to boost trade amongst African partners. Skeptics argue that, this could be the very reason that is likely to cause friction between Africa and China under AfCFTA , which is the continent’s single-largest trading partner.

Some commentators have accused China’s role as the world’s factory, producing cheap products as being the cause that has stunted the development of African manufacturing and supply chains. 

As I indicated earlier, I grew up in East Africa, a major part of my childhood was in Uganda, I and other Ugandan children in Uganda in 60 wore what was known as Niytl Jinja.  A very comfortable cotton cloth made at the shore of lake Victoria, in Jinja, Eastern Uganda. It was made of cotton grown by peasants in the entire country. I as teenager I grew half an acre of cotton. That is about half the size of soccer field. Myharvest was enough to buy may self a second hand bicycle. An achievement equivalent to a teenager buying himself a second hand car today. I also  rewarded my grandmother with a full suit of traditional costume and had some balance to invest in the second farming season.

It is not cheap Chinese clothes that killed the cotton industry in Uganda, Tanzania, Kenya and other African countries, edging out young agro- entrepreneur like me. After all, in the 60s China was also struggling to build itself as a nation.  It is cotton subsidies, given to farmers in developed countries like   American and Russia that killed small scale teenage farmers like methen, and big scale cotton cooperative farmers across Africa.

With AfCFTA, Africa will take into account the rules of origin. So contrary to prophets of doom, African will not import cheap “Chinese clothes” and make shirts and pants to export to the neighbours. Countries with vast unutilized land like Zambia, DRC and Tanzania, will grow cotton, or even invite Chinese, and other experts to make clothes for export under AfCFTA.  Countries that traditionally practice animal husbandry, like Rwanda, Uganda, Kenya, Ethiopia, Somalia, Senegal etc. will invite china to process the hides and skins to produce, leather and leather products. This is what will qualify for rules of origin.

Why China?

You may ask: Why China? For the AfCFTA to succeed we don’t need bureaucracies. We don’t need American Congress, European parliament, or British House of Commons, to act. We need a partner with whom once we come out of the negotiation room, and the deal has been agreed upon, the implementation starts tomorrow,not next year not 2063. Our target is 2031-2063 at the latest. Let’s get moving.

Mweusi Karake, is veteran journalist, and former Head of Public Relations/Corporate Communication at the Common Market for Eastern and Southern Africa, (COMESA), currently based in Kigali, Rwanda.

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