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Op-Ed: Covid-19 may disrupt the schedule of the African Continental Free Trade Agreement

COMBATTING the spread of Covid-19 has now become the top priority of African governments, with every country dedicating already strained resources to weak public healthcare infrastructure, writes Agnes Gitau*.

Agnes Gitau: strained resources are being directed to weak public healthcare infrastructure

Though many countries, led by Rwanda, Ghana, South Africa, Kenya have made a headstart in the efforts to contain the disease. Many were decisive early enough, avoiding the confusion and dithering seen in countries like the United Kingdom and the United States. Social gatherings were banned and schools were shut very early on before the continent recorded many cases. This week, however, the numbers of positive Covid-19 cases are on the rise, prompting many countries to go on forced lockdown and others imposing curfews as an attempt to stop the spread.  The numbers of Covid-19  cases in 47 countries is slightly over 5000, 172 deaths and 371 recoveries, according to the Dakar-based Africa Centre for Disease Control (AFRICA CDC).

This means pushing every other commitment, including the launch of the Africa Continental Free Trade Agreement (AfCFTA) to the back burner. The Second Phase (Operational Phase) is expected to take place on July 1, 2020.

Despite optimism from the AfCFTA Secretariat, indications are that some deadlines will certainly be missed due to the impact of the coronavirus. Scheduled meetings to deliberate on the operational phase, which were due to take place in Addis Ababa, have been cancelled. AfCFTA  Secretary-General Wamkele Nene has said it will be impossible to keep to the schedule, given the current situation. He is however confident that the continent will find a way to deliver.

The AfCFTA will bring together all 55 member states of the African Union covering a market of more than 1.2 billion people, including a growing middle class, and a combined gross domestic product (GDP) of more than $3.4 trillion. In terms of numbers of participating countries, the AfCFTA will be the world’s largest free trade area since the formation of the World Trade Organization. Estimates from the Economic Commission for Africa (UNECA) suggest that the AfCFTA has the potential both to boost intra-African trade by 52.3 percent by eliminating import duties and to double this trade if non-tariff barriers are also reduced.

The main objectives of the AfCFTA are to create a single continental market for goods and services, with free movement of business persons and investments, and thus pave the way for accelerating the establishment of the Customs Union.

Many economies on the continent are struggling due to the disruption caused by the pandemic. Economists estimate the continent will struggle to meet the UN Sustainable Development Goals (SDGs) and will require at least $100bn bailout to survive the pandemic. Last week, led by IMF and World Bank, Africa’s creditors were urged to consider Africa debt relief to ease the pressure and exposure for many economies in the continent. More than 13 percent of Africa’s revenue goes towards debt servicing or repayment, if these funds could be re-directed to the anaemic health care infrastructure, it will go a long way. Africa central banks, led by Ghana moved very quickly with economic stimulus cutting interest rates and providing liquidity for commercial banks.

Commodity dependant economies like South Africa and Nigeria have been worst hit. Credit rating agency Moodys has already downgraded South Africa’s economy to Junk Status. we had a rallying call from IMF and World Bank on Africa creditors to consider debt relief for many in the continent to ease the pressure so they can focus on fighting the pandemic.

*Agnes Gitau is a managing partner at the Africa Advisory firm GBS Africa. @agnesgitau @gbsafrica

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1 COMMENT

  1. Or it could be an opportunity to ramp up the idea of collabotative value chains and intra-continental production of PPE and ventilators where possible then distribution. We need to think innovation opportunity. The British Government took their time to identify a place in the world to manufacture Covid test kits, settled on The Pasteur institute, Dakar to begin joint development and production of the life saving kit: it should not be cheaper to buy this kit in the UK than anywhere else in Africa because of an ill thought through idea of a free trade agreement’s multiple function. Free trade agreements and public health priorities are not mutually exclusive. Germany is taking in ICU dependent patients from Italy and France, the EU is designing a rapid cash injection pool for vulnerable members. I am sure relcacitrant even Hungary’s politicians will be the first to ask for this cash injection should their fatality numbers of citizens head north. C19 gives zero poop if a head of state is left, centre or right wing: semantics. I have no idea why so called diplomats that fly from capital to capital via Addis and Cairo are so short sighted.

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