Africa moving towards free trade
Protectionism is on the rise in global trade but Africa moves in the opposite direction, says Iina Soiri, Director of The Nordic Africa Institute.
TEXT: Elli-Alina Hiilamo
ENGLISH TRANSLATION OF ARTICLE PUBLISHED IN HELSINGIN SANOMAT 16 JUNE, 2018.
Protectionism is blowing over the Atlantic; Great Britain is exiting the European Union and the American president Donald Trump keeps threatening with trade war. Africa, however, is moving against the current. In March, 44 African heads of state met in Kigali, Rwanda, to sign an agreement on a continental-wide free trade area. Paul Kagame, Rwandan president and chairperson of the African Union, described the agreement as historic, ‘a new chapter in African integration’.
If the agreement is ratified, 90 percent of all goods moving within Africa will be toll-free. The agreement, if realised, would make the African free trade area one the largest in the world.
According to the director of Nordic Africa Institute, Iina Soiri, the agreement is important, though not yet signed by Africa’s largest economic powers South Africa and Nigeria. The free trade agreement aims to solve one the major problems for Africa’s economic development: the far-too-modest internal trade.
“Experts have argued for a long time that the best way to achieve African development is to increase mutual trade and domestic production”, Soiri says.
Around 18 percent of African trade takes place within the continent. In Asia internal trade counts for over 55 percent.
“When South Africa imports butter from New Zealand and chicken from Brazil, something is wrong”, Soiri notes.
Soiri is a veteran within development aid and Africa research. She has led the Nordic Africa Institute located in Uppsala for five years. Earlier she has worked at the Ministry for Foreign Affairs in Helsinki and lived altogether 20 years in five African countries working on various development and research projects. Her enthusiasm for Africa began in the mid-1980’s when Soiri got involved in the anti-apartheid movement as activist in the Helsinki University student movement.
The free trade agreement reflects a long trend towards integration on the African continent. The project dates back to pan-African visions in the 1950’s, later realised through the continent’s eight sub-regional economic communities, some of which have protocols promoting free movement and mutual trade.
There is now a strong momentum for continental-wide integration and a unified African front, according to Soiri, who says that emerging countries have taken an increasingly greater role in industrial production and innovation development.
“With China’s growing economic strength, the idea of a wealthy and dominating North is breaking down”, Soiri says.
“Protectionist trade politics may also lead to a situation that wealthy counties are looking for new trade partners from the Global South. Africa wants to take advantage of this multipolar economy.”
Another important factor is the increasing importance of the African Union, with headquarters in Addis Ababa, Ethiopia. Its current chairman Paul Kagame is a man of action. He has lifted Rwanda after the genocide to become a stable attraction for innovations and tourism. Even if Kagame’s leadership has authoritarian tendencies, he enjoys the trust of the other African leaders according to Soiri.
Pan-africanism is featured in the AU:s ambitious vision Agenda 2063, a document that is vigorously promoted by Kagame. Its aim is to build a unified and stable Africa, independent of development aid. The free trade agreement and inter-linked protocol on free movement signed by 27 countries is seen as part of a realisation of this vision.
Free movement is already a reality between many African countries, Soiri notes.
“Africans move from country to country to larger extent than most people might imagine”, Soiri notes.
“For example almost one quarter of Zimbabweans have migrated, and gone after employment particularly to South Africa.”
The attitudes towards integration among Africans has been studied by the research network Afrobarometer, which made a continental-wide survey from 2014 to 2016. According to the survey, conducted in 36 countries, there are wide regional variations as regards to support for integration. However, more than half of the respondents supported the idea of free movement between countries. About 60 percent were positive towards the African Union and sub-Regional institutions.
There are great expectations on integration in Africa and particularly the African Continental Free Trade Area.
The United Nations Trade and Development Congress UNCTAD estimates that the free trade agreement will double the continental trade in five years. It is believed that it will strengthen import substitution and create jobs particularly for the young people.
There are problems however. Moving goods between the countries is slowed down by practical hurdles – slow bureaucracy, weak infrastructure and corruption. The continent badly needs foreign investment, particularly technology and know-how, in order to launch its own industry and manufacturing. UNCTAD believes that free trade agreement can increase Africa’s attraction and investments, having decreased in recent years due to higher price on raw materials.
Soiri warns that Africa runs the risk of becoming the world’s sweatshop due to its cheap labour. She is worried that when costs of labour go up in Asia, multinational corporations will move their factories to countries where conditions of employment and salaries are not regulated.
“Growth needs to occur in such away that people feel well when producing it.”
The purpose of the free trade agreement and the overall integration is also to break colonial patterns in global trade and world politics. Africa has traditionally been the continent where wealthy countries have acquired slaves and raw materials in order to speed up their own economic growth.
Even today the discussion on Africa’s future has post-colonial tones according to Soiri.
“Often Africa is discussed as a future continent for someone else. It is asked how Chinese or Finnish companies could benefit from continent’s potential”, Soiri notes.
Post-colonial patterns are now also been broken in culture and science. Three years ago a student movement to decolonise the university curriculum was spread from University of Cape Town.
“Whereas the first post-colonial African elite wanted to copy Western culture, now African own tradition is emphasised in fashion, food and music.”
The Nordic Africa Institute led by Soiri has around 40 staff and conducts research on for example African mining industries, domestic policies and migration. Soiri also, however, keeps a close look at Finnish development policy, which like other Western countries moved its focus from non-governmental organisation towards the private sector.
“New instruments and actors are not necessarily bad”, Soiri notes.
“But the main purpose of development policy – poverty alleviation – should not be lost. It is endangered if development policy starts to resemble export promotion.”
Neither development aid, nor free trade alone can solve the negative circles that many African countries battle with. Heavy debt burden, long-lasting conflicts and inequality gaps. According to Soiri these problems call for African solutions. As most development researchers Soiri emphasises the importance of functioning institutions, a field where the Nordic countries have something to offer, she says.
“Chinese market economy and authoritarian models now seem to attract many African leaders, keen for results. But there are also those within the African intelligentsia who are attracted by the ideals of the Nordic welfare state.’
- Director of the Nordic Africa Institute since 2013
- The institute is financed by the governments of Sweden, Finland and Iceland.
- Lives in Uppsala, has home also in Myllykoski
- Has lived in Namibia, Angola, Mozambique, South Africa and Tanzania altogether 20 years
- Enthusiastic football fan. Soiri is a minor owner of football team Myllykosken Pallo. Her son Pyry is a football professional in Belarus.