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Looking South? Africa and the Tripartite Free Trade Agreement

The new agreement seeks to promote development through trade and better conditions for workers
The new agreement seeks to promote development through trade and better conditions for workers

As 26 African countries lay the groundwork for the ‘Cape to Cairo’ Tripartite Free Trade Agreement (TFTA), our guest blogger Kim examines what this could mean for the continent, who benefits, and the impact on the countries not included.

The proposed deal will combine three existing trade blocs – the East African Community, the Southern African Development Community and the Common Market for Eastern and Southern Africa (COMESA) – but countries in West Africa are noticeable by their absence. The deal covers a range of situations, from the developed economies of South Africa and Egypt to poorer nations with identified potential such as Sudan and Ethiopia.

Freeing a generation from poverty?

The deal, should it come into being, represents a major postcolonial step which gives African nations the freedom to determine their own trajectory of growth and the form that takes. Should they choose to embrace progressive practices such as Fairtrade, organic agriculture, green energy and the promotion of better working conditions, they can accelerate away from the poisoned legacy of colonialism and embrace a future of their own making.

To fully reap the benefits of a free-trade area, the 26 African nations involved would need commit to huge investment in infrastructure. Transport links – road, rail and air – across the continent are in dire need of upgrade and maintenance. Investment on this scale will bring the potential for massive job creation.

There are 4,500 miles between Cape Town and Cairo after all, and a boom in new industries and technologies would follow the winding transport corridors. The proposed trade area covers 625 million people and this level of investment could pull a generation out of poverty as countries work together to accommodate the movement of goods on a scale not witnessed before.

The case for investment in green energy

It has been widely acknowledged that the countries within the TFTA will need to address their power infrastructure as part of the growth of manufacturing. Given the potential for the use of solar power across Africa, it would be a shame not to see this being utilised. It would also be a huge boost to the world’s poorest continent if future growth could happen without the economic and environmental cost of fossil fuels. Moving in this direction would provide more jobs than traditional means of power generation and would offer African countries a more secure future and the chance to lead the world in the adoption of renewables.

The troubled Desertec project in Morocco, with its ambitious plan to provide 15% of Europe’s electricity, began with European investment and the aim of solving a European problem. If the 26 TFTA countries decide to focus on green energy growth, they no longer need to see Europe and EU as an enabler, but rather as an export market. Viewing the potential for energy generation in the Sahara from this perspective makes a better case for investment as it will generate cross-continental security along with clean electricity.

Big pharma and antiretroviral drugs

Alongside leading green energy generation, there exists the potential to relieve Africa of its dependence on the big pharmaceutical companies. Big pharma companies are notorious for charging way over the odds for antiretroviral HIV/AIDS drugs, thereby protecting their own profits by ensuring that the most vulnerable and needy cannot afford lifesaving and life-prolonging treatment.

The potential to end reliance on big pharmaceutical companies for access to treatment is hugely exciting; Kenyan academic Calestous Juma was quoted by the BBC as saying, “by having larger markets, it signals the possibility of being able to manufacture products at a scale that is cost-effective. For example, where you need large-scale investments like $200M to create a pharmaceutical factory, you couldn't do that if you were only selling the products in one country."

Those left behind: West and Central Africa

The sweeping assertion of a ‘Cape to Cairo’ deal sounds all inclusive, but in reality two trading blocs in Central and West Africa - Ecowas and Semac - have been left out of talks. There is concern that uneven development could further impoverish countries in sub-Saharan West Africa as their current trade partners leave them in favour of the economies of scale that will exist within the much larger TFTA bloc.

It is possible that we will see a similar method of growth to that of the EU, with countries applying for membership. In all likelihood, Nigeria would lead the way - it is the wealthiest country in Africa and ranks 20th in terms of global wealth, has a good relationship with the west and is oft-hailed as a beacon of African democracy.

One of the problems of the EU is that non-member countries wishing to join must prove their economic clout, something that is very difficult to do from outside the protected trade fortifications of the EU. One of the most striking elements of the proposed TFTA deal is how inclusive it is (within South, Eastern and areas of North Africa) and it would be a shame if this attitude of growth for all was lost once the benefits began to be felt.

For too long, African nations have watched as their land and people have been exploited for profit held far from the continent’s shores. The TFTA gives 26 countries the opportunity to determine their own future and could see Africa lead the way in green growth, fairtrade and a model of economics that values people over profit. Whilst the scale of the agreement and the exact countries involved remains to be decided, the world should watch with interest and maybe start looking south as well as east to find the next global industrial powerhouse.

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