The start of trading for the Africa Continental Free Trade Area (AfCFTA) originally due to commence on 1 July 2020 has been delayed due to the Covid-19 pandemic, but in this exclusive interview with Omar Ben Yedder and Stephen Williams, its newly elected secretary-general, Wamkele Mene, stresses that the continent is still fully committed to the AfCFTA, a critical component of Africa’s recovery strategy
We might have expected to talk to Wamkele Mene from his office in the AfCFTA headquarters in Accra, Ghana. However the AfCFTA Secretariat has been prevented from moving to its permanent home by border closures caused by the Covid-19 pandemic and remains temporarily based at the African Union Commission in Addis Ababa, Ethiopia.
Nevertheless, work continues to prepare the continent for this hugely important initiative, designed to significantly boost intra-Africa trade flows and industrialisation.
The paradox is that while AfCFTA is a wholly-owned African development initiative, it has been stymied by the worst global pandemic in living memory. This pandemic has derailed everyone’s plans, including the scheduled start date of AfCFTA trading on 1 July.
As Mene explains: “Because borders are closed, there are no flights, about 42 African countries have instituted lockdowns and containment measures and most importantly, quite sensibly and responsibly, governments are focusing on fighting the pandemic. For governments across Africa, that is their priority today and so it should be. The African Union is very much engaged in coordinating a pan-African fight against the pandemic.”
There were discussions about whether the AfCFTA should continue on its schedule but, as Mene clarifies, there were too many obstacles to overcome, including technical ones such as hosting a virtual meeting in the four official languages of the African Union, guaranteeing strict confidentiality of the negotiation documents and scheduling meetings to take account of the six different time zones across Africa, as well as the need for regional consultations prior to the negotiations. He says that the decision on the start of trading is under consideration by the Assembly of Heads of State.
“Ourselves, from a trade response, are also providing advice in terms of what other trade tools could be available to each individual country, but also at a pan-African level, to fight the pandemic.“
The AfCFTA Secretariat quite early in the pandemic with the Africa Centres for Disease Control and Prevention to see what could be done from a continental level to get goods to where they are most needed. “We agreed that we really need to give further meaning to the trade corridors and in doing so we compiled a list of essential goods – soaps, germ-killing products, personal protection equipment, etc,” says Mene.
“It contains about 45 products and we submitted it to the ministers of trade with the recommendation that these products should be allowed transit through the trade corridors and that there should be a moratorium on duties on these pandemic-fighting essential products, at least for the period of the pandemic.
“Of course, these issues related to duties on products are subject to national government determination. However, we think that it is very important that each government in Africa operates the trade corridors that have been agreed by the heads of state and second we think it’s very important that these essential goods are allowed transit on the basis of the moratorium on the duty for a limited period of time.”
Interestingly, he also points out that, had the AfCFTA negotiations been completed, “it’s very likely that some of these products would have been a subject of zero-rated duties anyway. We can agree on a zero duty so that we are able to fight the pandemic. The ministers of trade were broadly supportive.
“Of course, the concern is that the products must be manufactured in Africa and must meet our rules of origin. For example, the company that manufactures Dettol, their plant is in Nigeria. The same company manufactures soap, they have another plant in South Africa. This is the type of economic activity that we think will impact in the fight against the pandemic.”
Mene is absolutely convinced that the African Union has in place a very coordinated strategy to fight the pandemic.
“It is being led by the president of South Africa, his Excellency President Cyril Ramaphosa as the Head of the African Union Assembly of Heads of States. We are seeing a very significant progress from a pan-African coordination point of view, centralised at the Africa Centres for Disease Control and Prevention.”
Africa, to many extents, is an outlier in this regard. “When you look at the efforts of the World Health Organisation, the G20, I think those are all commendable, but it is regrettable that we don’t have a unity of purpose across the world from all countries to fight the pandemic as we had trying to respond to the global financial crisis in 2008/2009 which was a perfect example of global solidarity and global co-ordination.”
Looking to the future
Many are anticipating a post-Covid-19 global recession, and Mene is no exception. However, he clearly anticipates that regional trade and greater regional integration will be a solution for coming out of this potential economic downturn.
“The sense that I got from the trade ministers’ meeting [in May], and I made the point in my opening statement to the meeting, was that when you look at what is happening in countries around the world, they have the monetary and fiscal policies space to provide very significant economic relief packages,” he says. “The US and European Union have trillions of dollars to re-inject growth and dynamism into their economies. That option is not available to many African countries.”
“If we are looking at a post Covid-19 world, if we’re looking at recovery, really the only tool at our disposal that can boost such a recovery is implementing the AfCFTA and doing so in such a way that we significantly boost intra-African trade and that we implement the agreement in such a way that we do enhance our investor profile. We have to implement those trade and investment rules that we have agreed to so that we become a much more attractive investment destination.
“When we get to negotiate intellectual property rights in a few months’ time, Covid-19 permitting, we also need to see if we can use our intellectual property rights regime to support industrial development in Africa.
“The pandemic crisis is an opportunity for us to redouble our efforts and really look at our industrial development strategy from an implementation standpoint and to really fast track implementation of this agreement.”
With so many countries as parties to the AfCFTA, it seems inevitable that post-Covid-19, disagreements will arise, and the Secretariat has a central role in resolving such disagreements by providing a sophisticated dispute settlement mechanism.
It is modelled on the WTO’s disputes resolution protocols, but with key improvements “so that we don’t end up in deadlock like the situation at the WTO’s appellant body,” Mene comments.
Clarifying, he says that the AfCFTA dispute resolution body is a distinct body, working independently from the Secretariat and established by the agreement itself.
“It operates independently – the adjudicators will be chosen by the parties to the dispute. They will be required to adhere to certain rules and opinion on standards, whether it’s minimum standards of conduct as adjudicators or minimum qualifications that they will have to adhere to.
“There will a court of first instance, a dispute settlement body and a panel. It will adjudicate on the matter, on the dispute. If you don’t like the outcome you have the right to appeal the outcome to an appellant body.
“It’s very similar to the WTO. The Secretariat’s role is simply to ensure that the dispute settlement mechanism of the AfCFTA as a whole has appropriate resources in order to function properly.
“As the Secretariat we are required to be neutral and to simply provide the necessary resources for the disputes to be settled, but the agreement does make provision for the secretary-general, that is myself, to exercise good offices in trying to resolve a dispute before it becomes a formal dispute.
“There will be enforcement and adherence to the rulings of the appellant body because this adds to countries’ investor outlook. If there is a perception that as a particular country you do not adhere to the rule of law and in this case, you do not adhere to the rule of African investment law or African trade law, that has an impact on your inward investment .
Mene makes one final point: ”All heads of state continue to be very committed to this agreement and we will continue to be there. The political commitment to do this continues to be there.
“I certainly have not heard a single minister or head of state say that the pandemic is going to slow us down beyond just the temporary delay.
“I want to assure everybody that we are even more resolute as Africans to make sure that when the conditions are right, when the time is right, we will resume our work and we will do so with even renewed vigour. I don’t want people to be discouraged or to read this in a way that suggest that the level of commitment has reduced. It has not.”