April 20, 2018//-As a relatively young Minister in the mid-nineteen nineties sitting with my Organisation of African Union (OAU) peers, I pondered deeply if Africa will pull itself together and forge ahead.
At that time, Rwanda was coming out of its genocide and most of West Africa was still experiencing military coups. Central Africa was somewhat calm but some countries there had subtle political tensions, with what is termed the “first Congo war” taking place in the former Zaire now Democratic Republic of the Congo (DRC).
Whilst Somali’s civil war intensified, Ethiopia in Eastern Africa commenced the developmental-state experiment under Prime-Minister Meles Zanawi and Eritrea gained independence.
Northern Africa, pretty much calm with “strong” leaders steering the affairs of state and some of whom played a prominent role in the Israel-Palestinian peace process which resulted into the creation of the Palestinian National Authority.
The end of apartheid and the ushering in of a democratic South Africa was the most positive highlight during this period for the OAU as it demonstrated that the OAU; as a Continental liberation movement, had achieved its ultimate goal of politically liberating Africa.
Globally the mid-1990s also saw the rise of alternative and new media, multiculturalism and strengthening of democratic principles; thanks to the internet and satellite television. The world was indeed changing but Africa was still branded as the hopeless continent.
Fast forward, March 2018 in Kigali, at the 10th Extraordinary Session of the AU Assembly, Africa’s leaders came together to append their signatures on the establishment of an African Continental Free Trade Area agreement (AfCFTA).
Upon implementation, the agreement will make the continent the world’s largest trade zone where goods and services can be traded freely among African Union member states.
Of the 55 African Union member states, 44 appended their signatures on the AfCFTA agreement, 43 countries signed the Kigali Declaration and 27 signed the Protocol on Free Movement of Persons, Right to Residence and Right to Establishment.
Following the ratification of the AfCFTA by countries, its implementation could increase intra-African trade by 52% by the year 2022.
In addition, the agreement will help bring about the removal of tariffs on 90% of goods and also liberalise services and tackle other barriers which hamper trade between African countries, such as long delays at border posts.
I must say it was a proud moment for Africa and for me in particular being in the plenary hall of the Kigali Convention Centre and observing an emotional yet joyous and enthusiastic signing of each African leader or their Minister, of the Agreement, Protocol and Declaration, all under the able leadership of the President of Niger, H.E Mahamadou Issoufou of Niger as the Leader of the AfCFTA, flanked by President Paul Kagame of Rwanda, current AU Chairperson and H.E Moussa Faki Mahamat, Chairperson of the African Union Commission.
The gradual end of colonialism in the 1960s and 70s now proves to have brought mixed blessings to Africa. We now have 55 countries; 47 of which are on the African continent and the remaining are island nations.
Thus, the end of colonialism gave birth to new multiple states cutting across people’s ethnicity, cultures, traditional norms and value-systems.
In 1963 the newly “independent” African countries came together to form an organisation (OAU) that would promote the unity and solidarity of the new African countries and act as a collective voice for the African continent.
Notwithstanding this aspirational desire, the same countries also emphasised the importance of the territorial sovereignty of their respective countries and therefore the OAU remained neutral in terms of internal country specific affairs.
By the mid-1970s regional economic blocks (now referred to as the Regional Economic Communities) started to emerge.
With the introduction of Regional Economic Communities; RECs as commonly known, African integration began to take two very different paths.
The first being a somewhat political path which focused on the eradication of all forms of colonial ways of life and notions by defending the interests of independent countries and helping to pursue those territories that were still-colonised- the OAU path.
The second, focused on regional economic integration with the two most advanced; Economic Community of West African States (ECOWAS) and the East African Community (EAC), signing a number of protocols that called for free movement of goods, services and its peoples within the respective regions.
Africa now has 8 African Union recognised Regional Economic Communities, but there are also a number of sub-regional bodies that are actively pursuing Africa’s integration agenda.
So despite the forms of integration that Africa or parts of Africa experimented with, by 1991 the Abuja Treaty established the African Economic Community (AEC), the Abuja Treaty proposed that the Regional Economic Communities (RECs) as the building blocks of Africa’s integration.
Ten years later, in 2001 at the OAU Summit, the New Partnership for Africa’s Development (NEPAD) was adopted by African Heads of States and Government as the socio-economic programme that ought to accelerate economic co-operation and integration among African countries.
The same OAU Summit recognised the need for close involvement in the formulation and implementation of all programmes of the RECs within the African Union. Additionally, the OAU/AEC Summit in Lomé, Togo adopted the Constitutive Act of the African Union, which formally replaced the OAU in 2002.
Following these important milestones of the African integration discussion and agenda, came the reform process for a vibrant African architecture. And the architecture has re-introduced the integration agenda.
The discussion has generally concluded that due to economies of scale and tiny economies of most African countries, a regional dimension and approach to Africa’s transformation is the best way forward.
The sequence of Africa’s path to integration as I have outlined, amongst others, place a demand on an urgent need to re-think Africa’s priorities and therefore a coherent and consolidated strategy was launched at the 50th Anniversary of African Unity.
In 2013 the African Heads of State and Government adopted Agenda 2063 as an expression of the political intentions and aspirations of the Continent, guided by a new vision of an integrated and prosperous continent. The Agenda enunciates Africa’s renewed resolve and commitment to pursue sustained socio-economic growth and development.
The 1st Ten Year Implementation Plan, running from 2013 to 2023, draws heavily from the experiences in the implementation of the NEPAD programme. While the plan outlines broad development priorities and programmes, there is need to translate Africa’s development vision further into concrete actions.
The global view is that business and consumer confidence have generally improved, but investment, trade and productivity have not strengthened as excepted.
This has a direct impact on both foreign and domestic investments into Africa’s development, particularly into Africa’s infrastructure.
With growth rates in the developed world more-or-less stagnating, Africa although not significant to make a registered impact still reminds the second fastest growing region.
Therefore, Africa holds much promise to those investors willing to invest time in understanding our local economies, and identifying opportunities presented by the booming middle class who have an endless appetite for consumables.
In the Africa Report titled Africa in 2017, almost all 55 countries end their forecast by anticipating to implement or commission energy, transportation and other infrastructure projects like seaport-terminals and airports.
Our countries continue to appreciate the irreversible need to industrialise by streamlining trans-boundary infrastructure projects as indicted in the Africa Report 2017.
However, if Africa is to be successful in increasing the number of regional and domestic infrastructure projects and show impact in advancing sustainable inclusive development, wholesale changes are needed in mind-set and perceptions on the issue of “Investment Risk” in Africa.
The AU-NEPAD Continental Business Network (CBN) is continuing its agenda towards de-risking infrastructure projects as a key element to attract financing. Pension and Sovereign Wealth Funds emerged as the key catalyst to close this financing gap.
In September 2017, NEPAD under the guidance of the CBN, initiated a revolutionary campaign that is African-led and African-owned, aimed at increasing the allocations of African asset owners to African infrastructure from its currently low base of approximately 1.5% of their assets under management (AUM) to an impactful 5% of AUM.
The CBN has called for a more strategic engagement with domestic institutional investors in support of this campaign.
The purpose of the 5% Agenda campaign is to work with Pension and Sovereign Wealth Funds including Ministers of Finance to gradually increase infrastructure investments, using financial resources available on the continent and strengthen public-private partnerships to mobilise financial and global institutional investments.
In conclusion, the AfCTA, is a monumental step for Africa; another significant milestone in Africa’s integration process. I have to however aptly point out that the AfCFTA was signed in Kigali, the capital that experienced complete turmoil some 24 years ago but is now poised to become the futuristic “Wakanda.”
By Dr Ibrahim Assane Mayaki, CEO of NEPAD Agency
