China a reliable partner of Africa to promote trade under AfCFTA

Published: November 08,2022

By Staff Writer

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.

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 will provide cash assistance and capacity-building training to AfCFTA secretariat.”

The AfCFTA is the world’s largest free trade area of a single market for goods and services of almost 1.3 billion people across Africa that enables deepening economic integration of Africa. It was established in 2018 by the African Continental Free Trade Agreement.

The trade area could have a combined gross domestic product of around $3.4 trillion, but achieving its full potential depends on significant policy reforms and trade facilitation measures across African signatory nations.Th world bank report 2020, estimated that by 2035, real income gains from full implementation of the agreement could be 7 percent, or nearly $450bn.

The AfCFTA aims to reduce tariffs among members and covers policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and technical barriers to trade. 

Rwanda was selected   among countries to kick start trading under the African Continental Free Trade Area (AfCFTA) framework in a pilot phase that also involves six other countries, namely; Cameroon, Egypt, Ghana, Kenya, Mauritius and Tanzania.

Recently, RwandAir, put in place a preferential freight tariff for Rwanda exporters under the African Continental Free Trade Area (AfCFTA, according to media reports. The promotional offer gives Rwanda exporters a low pay of $1.4 per Kilogramme is aimed to motivate the business community to leverage AfCFTA- one of the 13 flagship projects of Agenda 2063 in Africa. It should be noted that in August, 2022 RwandAir had increased airfreight fee on a kilogramme of fresh produce from $1.8 to $2.

So the future of AfCFTA can only be looked at in the mirror of other regional integrations ambitions that came before it. 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.

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 up the 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

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. They built a few and they are not about to do so today. Particularly, the western so called “democratic models”, will not facilitate that. Neither Democrats nor Republican will win votes by promising to build Infrastructure in Africa, the same goes for Europe political 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 to play 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. 

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.

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 immediately.

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