Analysis & Opinions - The East African

Building Africa Bloc by Bloc

| June 20, 2011

One of the most persistent images of Africa is that of a fragmented continent whose nation states originate from the Western "scramble" for colonies in the 19th century. The recent initiation of negotiations for a Cape-to-Cairo Grand Free Trade Area will reposition Africa as a major player on the global trade scene.

The grand free trade area will cover 26 countries with a combined GDP of $875 billion and a combined population of 700 million. This is a significant market, with a single economic space whose systemic benefits will be larger than the sum of the three regional economic communities.

It will be more attractive to foreign investors and stimulate large-scale production that will in turn help to lower the price of manufactured goods. It is estimated that exports among the 26 member countries increased from $7 billion in 2000 to $32 billion in 2011, while imports grew from $9 billion to $35 billion over the same period. This phenomenal increase was spurred by the free trade area initiatives of the three regional blocs.

Strong trade performance, when well designed — for instance, by promoting small and medium enterprises that produce goods or services — can assist the achievement of the core objectives of eradicating poverty and hunger, promoting social justice and public What is more, the more we trade with each other, the less likely we are to engage in war.

The speed at which leaders have moved to start negotiations has been equally phenomenal. The process started in 2008 when heads of state of the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC), and the Southern African Development Community (SADC) met in Kampala and called for negotiations to start as a matter of urgency.

The grand trade area will build on three pillars: market integration; infrastructure expansion; and industrial development. The formal negotiating process established an institutional framework and process to be followed. This includes a summit of heads of state, a council of ministers, sectoral ministerial committees and a negotiations forum. The negotiations will be conducted in two phases. The first phase (lasting up to one year) covers trade in goods (including tariff liberalisation, rules of origin, Customs co-operation, non-tariff barriers, trade remedies, sanitary and phytosanitary measures, technical barriers to trade, and dispute settlement).

The second (lasting up to five years) covers trade-related issues (including trade in services, intellectual property rights, competition policy, trade development, and competitiveness).

The agreement will be signed at the end of the first phase, and the second phase will be a built-in agenda for further negotiations. Strong public awareness programmes have been mounted for stakeholders including parliamentarians, the business community, educational institutions, civil society, and development partners.

One of the key limiting factors to intra-Africa trade is infrastructure — energy, transport, irrigation and telecommunication. The Democratic Republic of the Congo, for example, is the same size as Western Europe while its total paved road network is equivalent to that of Bahrain. DRC's ability to effectively participate in the free trade area will depend on how fast it ramps up infrastructure construction and maintenance.

The continent will need nearly $500 billion over the next decade to meet its infrastructure needs. This factor alone is likely to define Africa's diplomatic relations with the rest of the world. Countries that have strong standing capacity to help build infrastructure will emerge as natural partners with Africa. Conversely, countries that want to help shape the future Africa as defined by Africans should be thinking about how to engage the continent through engineering and technology.

Over the decades, large infrastructure projects have earned a bad name as breeding grounds for corruptions, drains on national coffers and threats to the environment. These concerns will need to be addressed. The region will need to adopt smart procurement practices that are based on new performance standards in these areas. It is also an opportunity for the continent to start exploring new technologies and materials for use in infrastructure projects. These investments will also need to take into account possible impacts of climate change on infrastructure.

The anticipated infrastructure investments also offer Africa the best opportunity to build up its engineering capabilities directly through project design, execution and maintenance. Dedicated technical institutes can now be directly linked to major energy regional energy, transportation, irrigation and telecommunications projects.

Such specialised universities will have the opportunity to combine theoretical training with practical work through experiential learning. This approach will also help to diversify higher education approaches without the pressure of seeking to reform existing universities. Some of them will opt to follow new models while others will continue to serve traditional human resource markets.

Examples of such universities already exist in Africa and other parts of the world. Egypt, Kenya and Ghana have universities dedicated to the telecoms sector. Malaysia pioneered an infrastructure university college inspired by the needs of the Ministry of Public Works. China has a telecommunications university and South Korea's Pohang University of Science and Technology was incubated by a public iron and steel corporation. There is no shortage of models to learn from.

This logic of university formation is not limited to infrastructure projects. Africa's diverse exports such as minerals and agricultural commodities are associated with long value chains that can provide adequate material for curriculum development, innovation in pedagogy and diversity in the location of universities. Coffee, chocolate, tea, roses, copper and diamond universities are just examples of those waiting to be created.

The combined investment in infrastructure and technical training will provide a strong basis for fostering technology-based enterprises with the inner dynamism needed to propel economic prosperity. The emergence of such enterprises will in turn stimulate innovation in the financial sector, leading to the emergence of venture funding activities.

Africa is entering uncharted territory with only a few years’ experience of managing regional trade affairs. The good news is that it can draw from the experiences of existing regional bodies to advance its agenda. The bad news is that there is no systematic mechanism for training regional integration professionals.

The case for creating a graduate School of Regional Integration is even stronger. Africa is positioning itself to use trade to fight against poverty through trade and regional integration. But doing so without a school of regional integration is like preparing to go to war armed only with a doctrine but without the benefits of a military academy.

The map of Africa as a hopeless collection of failing post-colonial economies is being redrawn before our very eyes. Credit should go to African leaders for their stubborn refusal to accept the future as predicted by others but to seek to change it. As they say, for Africa, the future is not what it used to be.

Professor Calestous Juma teaches at Harvard Kennedy School and is author of The New Harvest: Agricultural Innovation in Africa (Oxford University Press, 2011) Twitter: @calestous

For more information on this publication: Belfer Communications Office
For Academic Citation: Juma, Calestous.“Building Africa Bloc by Bloc.” The East African, June 20, 2011.

The Author

Calestous Juma