How Africa’s free trade agreement could be the best stimulus after COVID-19

Amid the COVID-19 pandemic, the operationalization of the African Continental Free Trade Area (AFCFTA) has been postponed to December, posing challenges but also presenting potential opportunities for the trade area. Former Secretary of UNECA, Carlos Lopes, shared insights on the impact of the pandemic and the potential opportunities arising for African trade. The implementation of the CFTA is a complex process that requires time and adjustments. Professor Lopes emphasized the need to rethink and restructure trade agreements to prioritize development over trade for the sake of trade. The disruption caused by the pandemic has questioned traditional trade norms and orthodoxies, paving the way for novel approaches and strategies in African trade. One key opportunity highlighted by Professor Lopes is the emergence of joint procurement by African countries. This innovative approach has the potential to be expanded to various sectors, boosting intra-African trade and regional cooperation. Additionally, the pandemic has underscored the importance of fostering innovation in Africa, as demonstrated by the continent's ability to produce essential medical supplies locally. The creation of value chains in critical sectors like protective and hospital equipment signals a shift towards self-sufficiency and resilience in the face of global challenges. While the delay in the operationalization of the AFCFTA may allow more countries to commit to the agreement, Professor Lopes emphasized the need for patience and strategic planning. The CFTA represents a significant and ambitious regional initiative that requires meticulous implementation and coordination among member states. Key areas such as dispute resolution and rules of origin need to be addressed to facilitate smooth integration and trade flows. Despite some countries pursuing individual trade agreements with African nations, Professor Lopes believes that the collective strength of the AFCFTA will ultimately prevail over fragmented agreements. He pointed out that unilateral concessions like the African Growth Opportunity Act (AGOA) offer temporary benefits but lack the stability and long-term commitment needed for sustained investment. The skepticism surrounding these unilateral agreements underscores the importance of fostering transparent and inclusive trade frameworks like the AFCFTA. As countries navigate the economic fallout of the pandemic, strategic decisions regarding COVID-19 relief funds and debt moratoriums are crucial. Professor Lopes noted that African nations are becoming more discerning in their negotiations with international partners, ensuring that aid packages align with their long-term development goals. The reluctance to hastily accept relief funds or defer debt payments reflects a growing awareness of the need for sustainable and equitable economic strategies. The systemic challenges facing Africa, exacerbated by the pandemic, highlight the need for fair and supportive global practices that prioritize the continent's development needs. Despite the uncertainties and disruptions caused by COVID-19, the potential for Africa to unlock its trade potential and foster inclusive growth remains a beacon of hope in these challenging times.