The preamble to the Lagos Plan of Action for the Economic Development of Africa, adopted by the Organisation of African Unity in 1980, describes the economic situation of Africa as follows: "Rather than result in an improvement in the economic situation of the continent, successive strategies have made it stagnate and become more susceptible than other regions to the economic and social crises suffered by the industrialised countries."
Sadly, the statement is as relevant today as it was 40-odd years ago, when it was drafted.
The African Continental Free Trade Area (AfCFTA), which came into effect on January 1, is an effort to change the situation identified in the Lagos Plan of Action. Indeed, the AfCFTA is aligned with the Lagos plan, which promised to "undertake measures for the basic restructuring of the economic base of our continent … [and] adopt a far-reaching regional approach based primarily on collective self-reliance".
In its protocols, the AfCFTA plans to "encourage industrial development through diversification and regional value-chain development, agricultural development and food security".
It is difficult to argue with any of these goals, identified over four decades. Yet what seems to have been the hold-up?
My first travels in the continent began in 2011, as a young economist researching African economies. It was an exciting time, with Africa being celebrated as the "new frontier". (I have to admit, I didn’t quite understand — I still don’t — whether it was a frontier as in "on the outside/the periphery", or the next bold step for achievement.)
It was a time of high growth and high hopes. Nothing, it seemed, could go wrong.
In every country I visited, the people spoke of the same three things: infrastructure, infrastructure, infrastructure.
I still remember a figure on everyone’s lips: if Africa seeks to grow sustainably and deliver on its promises, the continent must bridge its nearly $100bn-a-year infrastructure gap.
We’re still on that very same script. And yet, the Lagos Plan of Action is still a dream.
I believe we have yet to answer the question about what sort of infrastructure we’re referring to. The answer is simply infrastructure that connects people to the outcomes we seek. It is a simple proposition that needs serious work on the part of leaders and policymakers.
The AfCFTA could improve the incomes of the nearly 68-million people who live on less than $5.50 a day
The coincidence of the AfCFTA coming into effect on the same day as the exit of the UK from the EU could not be missed — especially for lessons about the nature and evolution of such kinds of arrangements.
An article in Forbes Magazine articulates why the UK voted for Brexit, noting: "The EU failed to address the economic problems that had been developing since 2008 … for example, 20% unemployment in southern Europe.
"The difference between the lives of southern Europeans and Germans — who enjoy 4.2% unemployment — is profound. Europe as a whole has stagnated economically."
This means it is critical that the infrastructure and reforms imagined under the AfCFTA lead to employment and shared prosperity.
Time for follow-through
In a video posted on the website of the AU, AfCFTA secretary-general Wamkele Mene makes a commitment to ensure that "the benefits of the agreement reach all segments of the African continent".
On this score, his commitment speaks to what the Lagos agreement alluded to: "Africa is unable to point to any significant growth rate, or satisfactory index of general wellbeing, in the past 20 years" — a situation that persists, despite the progress that has been achieved.
A 2020 World Bank report, "The African Continental Free Trade Area: Economic and Distributional Effects", speaks of how African leaders and policymakers could maximise the potential gains of the agreement.
In its estimates, the World Bank argues that the agreement could uplift 30-million Africans, while improving the incomes of the nearly 68-million people on the continent who live on less than $5.50 a day.
However, effective implementation will be necessary.
If the AfCFTA is to succeed, it must deliver on the promise of creating employment and shared prosperity, ensuring it can no longer be said that "Africa is unable to point to any significant growth rate, or satisfactory index of general wellbeing".
- Payi is an economist and director of Nascence Advisory, focusing on labour issues
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