By Eromosele Abiodun
The Managing Director of LADOL, a Lagos-based industrial free zone, Dr Amy Jadesimi, has called on the African Union (AU) to develop a continental-focused solution designed to make the Africa Continental Free Trade Agreement (AfCFTA) a mechanism for tangible economic growth, focusing on local industrialisation, job creation and development.
Speaking with Neil Mushi of Financial Times, Jadesimi said the trade agreement should be aimed at creating jobs for African populace and also lifting African economies through industrialisation.
Experts have argued that AfCFTA has the potential to spur economic growth in a bloc of nations with a combined gross domestic product of more than $3 trillion, and creating the world’s largest free trade zone.
However, Jadesimi said the pact needs to offer incentives to boost African manufacturing or it will fail — by becoming an outcome that could turn the continent into a dumping ground for cheap Chinese, US or European goods.
“Are we going to create an entirely new paradigm for trade, that is Africa-centric, controlled by African countries, and that disincentivises foreign companies and countries outside of the continent from importing; are we going to do that?” she asked, adding that such is going to be really tricky.
According to her, the agreement must also contend with a history of regional trade agreements that have largely flopped and done little to bolster trade integration — the AfCFTA will need to be harmonised with eight of such regional pacts.
“Beyond the issue of whether the costs of an open market outweigh the benefits to specific countries, there is also the question of whether it is possible for Africa to overcome its structural challenges to trade,” she said.
Findings, however, show that AfCFTA aims to remove 90 per cent of tariffs to create a single market with free movement of goods and services but critics question the ability of under-resourced governments, deprived of that tariff revenue, to be able to fund infrastructure upgrade.