The coming into being of the African Continental Free Trade Area (AfCTA) is giving momentum to an idea that has been very long in the making – a unified position around trade, whose importance will no doubt extend beyond trade.
At the core of this idea is the shifting of economies in Africa from colonial and postcolonial dependence, which has largely relegated African countries to organising their economies around an extractive model.
The AfCTA unifies both internal and external relations and also desires for the African continent that which Europe wants for itself, ‘strategic autonomy’ – to borrow the latest parlance from the way the European Union partnership with China is unfolding.
This means that Europe has to be far more strategic in terms of the technology and production systems that should stay in Europe and those that can be given a helping hand by partners, albeit within the rules of the refashioned doctrine – strategic autonomy. The Covid-19 pandemic has reinforced the need to control key supply chains and ensure that they are resilient to disruption.
How can it be that Africa shall not also assert such a decisive desire for the way it uses its own resources and rebuilds its economies to be more sustainable and resilient, given the dire straits it finds itself in following the Covid-19 pandemic?
It is not only in terms of debt that it finds itself out in the cold but also in terms of vaccine nationalism. It would be a slight affront to think that Africans should not take responsibility for their own destiny. This is, if anything, the main consequence of the pandemic – having to fend for yourself, despite the goodwill here and there and then largely enclosures everywhere else.
Strategic Autonomy for Africa
First, the most primordial is to recognise that destiny lies within its own right from the southern-most tip of Africa to the lush deltas of the Nile. Such a vast body of Mother Earth contains within it a rich variety of natural resources, biological life and people. Africa can be self-contained, if Africa wants, but it cannot do so without some key strategic partners with the know-how, markets and capital. To do so, it has to engage them in an inclusive model of partnership, not a rapacious one.
Second, debt and illicit flows (whether due to internal doings or the doings of the former colonial masters) deprive African States of the ability to attain future financial endurance and the capacity to turn reserves into productive assets. Debt overhang is, tragically, playing itself out in the aftermath of Covid-19. Those that are owed are mostly foreign lenders, and African countries risk ceding sovereignty to foreign influence, if not control. The overall debt of Africa has grown substantially following the 2007 global financial crisis.
A survey of four Southern African Development Community countries – Zambia, Zimbabwe, Angola and Mozambique – undertaken recently by the Open Society Initiative of Southern Africa, found that countries that have substantial natural resources and are seemingly on the path to prosperous outcomes are caught up in a debt spiral that will take them years to extract themselves from.
For example, Angola is in that impasse after more than 40 years of being in the oil and gas industry. The country’s debt stands at about $70-billion, with more than half owed to lenders in other countries and has to be repaid in their currency.
Angola has, for years, been seeking to develop stronger localisation and empowering its local firms to play a bigger role in the oil and gas industry, which continues to be dominated by international oil companies.
This is the subject of detailed analysis by Jesse Salah Ovadia in his book, The Petro- Developmental State in Africa, which covers Angola, Nigeria and the Gulf of Guinea. Angola, seemingly, has made very little progress in deepening localisation and achieving even a modicum of industrial development. Such pervasiveness of large-scale extractives with very little diversification – sometimes called the resource curse – is a common feature on the continent.
Extractives dependence continues to represent old colonial patterns of development and ties. That legacy is even etched in the nature of road infrastructure. Economists who have studied infrastructure investment and geographical mapping of such infrastructure point to this core feature on the African continent – roads from a mine or a plantation, for example, lead to a port, and there is hardly a wider network of interior infrastructure that can foster healthy intranational and intraregional trade.
But what is clearly portrayed in Ovadia’s book is that the more the dependence on resources, the less the economies retain in value. Tragically, all value seems to be for the benefit of the few elites within and those outside. Resource dependence extenuates a viscous treadmill – in which more resources have to be extracted, just to pay the bill for today, and yet tomorrow never seems to satiate the debt trap. It is a classic debtors cycle: you borrow more just to pay the last bill and borrow again.
The backlog of development, as a result of the debt trap, always seems to delay the precise moment of catch-up because high debt shrinks hope, limits choices and the possibility of reaching a point where things can be shifted decisively in a different direction.
The AfCTA’s promise lies precisely in this: the need to hardwire the escape from resource dependence and to change the fundamentals of trade with partners that only view Africa as geopolitically important but only as an extractives frontier that serves their insatiable appetite for more and more resources without really giving anything in return.