Africa being the second largest continent of the world is pivotal for the world economy. Indeed, Africa is home to abundant resources and capital, but the continent is still prone to stumbling growth due to lack of productivity and haphazard infrastructure. Despite the presence of considerable tracts of agricultural and cultivable land, the African potential has not been utilized to its full extent due to lack of agricultural innovation and dearth of agro-tourism. The idea of the African Continental Free Trade Area was conceptualized through an agreement in early 2018 with an aim to bolster the fragile economy of the entire continent. This article argues that albeit, the idea of African Continental Free Trade Area is ambitious and assertive, but it is a right step at the wrong time.  

Understanding the Peculiar and Perplexing features of Africa

Though progressive in approach, the African Free Trade Agreement overlooks the peculiar and eerie features of Africa which in turn counteracts the proposed benefits. These include balance of payment challenges, constraints in rail and port capacity, high debt-to-GDP ratio, weakened intra-regional trade measures, geopolitical tensions, elusive fiscal health, vulnerability to climate change and natural calamities among others.

In the recent UN report released by the Department of Economic and Social Affairs, it was pointed out that even the continent’s largest economies are susceptible to high fiscal and debt pressures which brings down the regional average. For instance, Egypt and Nigeria had to devalue their currency to overcome the currency crisis. The regional economic consolidation of Africa was further beleaguered when Burkina Faso, Niger and Mali decided to pull out from ECOWAS (Economic Community of West African States). Due to peculiar geographical features in regions of Malawi, Zambia, Zimbabwe and Southern Africa, dreadful situation of drought emerged which forced the government to declare the state of national emergency.

The African growth is further subjugated by frequent energy shortages. Africa has the world’s lowest level of per capita use of energy. As per the recent data, 43 per cent of the total African population lacks access to electricity. This keeps 600 million African people in abeyance. The African Free Trade Agreement does not extrapolate anything to disentangle the energy crisis. On the contrary, the inception of the free trade agreement at this time would only create pressure on the existing energy supply. Additionally, Africa has witnessed an insurmountable surge in poverty and civil unrest which has become highly concentrated in fragile and conflict-affected states (FCS). The combined effects of all these make Africa an anomalous continent.

Amelioration of the Debilitated State of Infrastructure to be the Priority 

African history remained engulfed in a complex situation of colonization for a very long time. Perhaps even today, Africa continues to grapple with the aftermaths of colonization and the poor state of infrastructure is quite suggestive of it. The current model of infrastructure was developed by the colonialists to satiate their own needs and interests. Till today, there has been no effective upgradation of the infrastructural model. It is pertinent to note that 35 percent of Africa’s GDP is derived from agriculture. In the realm of the developing world, Africa still has the lowest national road density. This precludes the African rural communities from taking benefit of the colossal area of uncultivated land. As per the recent estimates, Africa possesses around 60 percent of the world’s uncultivated land. Keeping in view the recent escalation of the baby boom, Africa’s population is expected to double by 2050. However, the poor state of infrastructure is not equipped to handle the burden of the future population. 

Africa has currently witnessed an insurmountable surge in infrastructure deficit. As per the recent estimates, the infrastructure deficiency in Africa is 2 percentage points per capita GDP growth per year. A substantial number of infrastructural projects are hardly completed because they are contingent on long term deadlines which falls short of a clearly defined action plan. For instance, the agenda 2063, a flagship project under PIDA Priority Action Plan, boasts the phased development of the African Integrated High-Speed Railway Network with the master plans for 2043 and 2063. Africa is in dire need of a quick infrastructure and investment boom and not an obtuse model falling short of the resources to meet its deadline. For instance, a substantial percentage of the infrastructure budget of Africa comes from external loans and grants. These funds come with a commitment of fiscal consolidation such as reducing fiscal deficit and are remotely optimistic to develop fault free infrastructure.

Despite the recent upsurge in the development of railway networks, the average railway network density is still stuck at 30 to 50 kilometers per million people. This is far below that of Europe’s data at 200 to 1000 kilometers per million people. The transportation of a commodity from one country to another still causes immense delay. The transportation charges also skyrocketed because a substantial number of countries are already caught in the debt trap created by other countries. The prosperity of any free trade area is dependent on the ease of transportation. Transportation and trade are closely intertwined. The logistics and supply chain ensures a free import and export of goods. Hence, the fragile transportation infrastructure would lead to a sharp proliferation in the transportation costs and this situation can exacerbate further if the African Free Trade Area were to be interposed today.

Intellectual Property as an Impetus for the Inception of Free Trade Area 

The growth of the Intellectual Property in Africa has not been very sublime due to a persistent lack of continental inclusiveness. Unlike other technological configurations, intellectual property is premised on the idea of indigenous expansion inclusive of non-imitable traits. Africa already has two sub-regional IP organizations namely ARIPO (The African Regional Intellectual Property Organization) and OAPI (African Intellectual Property Organization). However, these organizations work in close tandem with WIPO and WTO and an incessant lack of engagement with the African Union has reduced the effectiveness of any regional efforts. To make matters worse, countries such as South Africa, Nigeria and Egypt are not the members of either of these organizations. This implies that a patent registered in South Africa is not enforceable outside its territorial limits. This is one of the prominent non-tariff barriers antithetical to the idea of a Free Trade Area. 

In Africa, even today people are oblivious about the commercial viability of registering a patent. This emanates from their vision of non-profit proliferation of manufacturing and trade industry. For instance, Cyber Tracker, a freeware developed to track animals in the Kalahari Desert was invented by a South African national Louis Liebenberg in 2010.  Though this satellite navigation system is registered as a trademark under the auspices of the United States Patents and Trademarks Office, this technology is still unpatented in South Africa. Similarly, ‘Dolos’, a concrete breakwater structure developed by a South African national named Mr. Aubrey Kruger, is also unpatented. Despite being an applaudable invention, it has fallen prey to unauthorized usage across the globe. This gives a clean chit to infiltrators to make use of this technology without any authorization from the real inventor. It is proposed that an IP cloud inclusive of all the 54 African countries be set up which would ensure free flow of the patented technology among the African nations and not beyond the continent. 

A substantial number of IP laws in Africa are tailored according to colonial needs.  Post the colonization, the African states had an option to withdraw from the IPR treaties signed by the imperial states. However, states such as Nigeria, Ghana and Botswana chose to remain the signatories to the Paris Convention. In this way, Europe extended its sovereignty over Africa. As per a recent survey, indigenous African inventors hardly file for patent protection in Africa. Hence, this hardly brings any incentive to the home. This is significant especially in the light of increased poverty rate in sub-Saharan African regions. As per the recent World Bank estimates, the number of poor people in Africa increased to 397 million in 2019 in contrast to 278 million in 1990. This is the record high increase which is an aftermath of the fragile state of the economy. It is suggested that an overhaul of the regional IP laws and organizations would strengthen the IP-intensive industries which in turn would increase the wage levels and productivity.  In fact, a comprehensive free trade agreement on patent law is better placed because wages in patent-intensive industries are proportionately higher than in any IP-intensive industry. This is because patents are more susceptible to innovation and productivity than its counterparts. Patents require a complete disclosure of the inventions by the developers which promotes further competitiveness. This nurtures social inclusivity and socio-economic welfare. However, the African patent system which enforces the TRIPS Agreement in its unaltered form hardly provides any incentive to raise opposition against the issuance of bad patents in the continent. A comprehensive patent law would guarantee public interest and this law must be brought in force before the enforcement of the African Free Trade Area.

Taking Lessons from the Failure of the North American Free Trade Agreement 

Africa must take lessons from the infamous fiasco of North American Free Trade Agreement. The North American Free Trade Agreement was entered between Mexico, United States and Canada which was subsequently extended to various Latin American and Caribbean countries. NAFTA, much analogous to the African Free Trade Area, had offered innumerable blind promises such as incredible escalation in jobs and wages, reduced trade deficit, and improved living conditions of the citizens. However, none of this happened in the way it was contemplated. The many failures of NAFTA eclipsed the limited benefits it produced. For instance, the USA began to export various machinery and tools to Mexico. Since Mexico had abundant assembly and manufacturing units, Mexico created the final machinery and cheap finished products, and it then had to export these products back to the USA. However, the USA began to import finished cheap mechanical products much more than its exports. This phenomenon is known as “Revolving Door Exports” which led to the increase in trade deficit from a mere USD 1 Billion to USD 74 Billion. This also led to the loss of existing jobs in the United States.

The situation in Mexico is quite analogous to any African country due to gargantuan levels of agriculture practiced there. Mexico remains sui generis to cultural paramountcy where every crop produced has ethnic strikingness. For instance, sixty percent of the cropland of Mexico is engaged in the production of corn over the course of two planting seasons i.e., is summer and winter. However, under NAFTA, the large US agricultural produce evicted the Mexican agricultural produce. As a result, around 10 million farm workers in Mexico lost their jobs. However, the new United States-Mexico-Canada free trade Agreement, also known as ‘NAFTA 2.0’ attempted to remedy this. The results have been conspicuous enough. Over the last 5 years, the production of corn in Mexico has been very stable. For the 2023/2024 Marketing Year, the production of corn in Mexico is estimated to be at 27.4 million metric tons, which is astoundingly high. 

In a nutshell, Africa must lay the groundwork to construct a flawless Free Trade Area instead of shaking a leg. Otherwise, Africa might have to bear the brunt of hurrying up just as what NAFTA did. 

Conclusion 

The African economy is susceptible to even minor jerks, the presence of which may hinder any future prospect of growth. At this crucial yet vexatious juncture, Africa needs an external boost in the form of foreign investment. Hence, the implementation of the ambitious African Free Trade Initiative must be postponed until the ambitious times are achieved.

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Harshit Lashkari and Aditi Singh Tomar are fourth-year law students at Dharmashastra National Law University, Jabalpur.

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Picture Credit: African Union Commission