African Free Trade Area: First Things First – Chofor Che

In late May 2015, How Africa published an article titled ‘Africa About to Launch a Free Trade Area Bigger than the EU or NAFTA.’ According to How Africa, this laudable trade area is purported to be greater in population than the European Union (EU). How Africa adds that the big Free Trade Area (FTA) aims at merging Africa’s markets into one common market. The launching of this project is envisaged to take place during the Tripartite Heads of State and Governments Summit June 2015, at the Egyptian resort city of Sharm El Sheikh. It is to be named the tripartite free trade area, composing of 26 states. How Africa opines that it will be the largest economic bloc in Africa and the likely pave the way for the creation of the Continental Free Trade Area (CFTA) come 2017. When this project goes operational, it will be the creation of a market of over 600 million people. Having a large FTA is a laudable idea, but are African states ready constitutionally and institutionally for such a large economic bloc? Can African states boast of a peaceful and stable environment to house this large economic bloc?

The US based Brookings Institute opines that 58% of Africa’s economic activity is to be covered by this pact, with over $1 trillion in Gross Domestic Product (GDP). If successful, such an endeavor is to furnish the free movement of goods, services, people and capital across Africa.

Several Central African states like Chad, Cameroon and Equatorial Guinea are still grappling with issues like the protection of investors’ rights, execution of public contracts, the rule of law and property rights. These are elements very germane for free markets to flourish in Africa. According to the Doing Business Reports for 2014, states in the Central African region like Chad and Cameroon still lag behind with respect to the above mentioned indicators. Statistics from the International Monetary Fund (IMF) show that states like the Central African Republic and South Sudan have poor records with respect to investor’s rights and property rights, reason why certain states may delay the laudable plan of creating the largest economic zone on the continent.

State protectionism remains a problem plaguing free markets in Africa. There are still a lot of trade and tariff barriers hindering the free circulations of goods and services between African states. For instance IMF and World Bank statistics show that states in the Central African region like Chad, Cameroon, Gabon and Equatorial Guinea state harbor rigid trade and tariff barriers within their borders which hinder the free circulation of goods and services. This is indeed a bad omen for the creation of a large FTA in Africa.

States in West and Central Africa are still vulnerable to inflation. According to the 2014 Doing Business Report, states like Chad and Equatorial Guinea still have a feeble monetary policy and do not guarantee the independence of this monetary policy from political authorities.

Logistical obstacles remain a big issue on the African continent which may retard the realisation of a FTA According to the African Development Bank (ADB), many states like Benin, Mali and The Gambia cannot boast of adequate infrastructure and logistics services. Such deficiencies increase transaction costs and discourage trade.

There is still conflict in South Sudan, some parts of the Democratic Republic of Congo and the Central African Republic. Recently South Africa witnessed a wave of homophobic attacks. Burundi was recently plunged into turmoil over a presidential term of office broil. With such squabbles all over the continent, it is hard for a large economic zone to be effectively created.

There is thus need for a change of events. Giving constitutional and legislative importance to property rights, the rule of law and a fluid environment for the execution of contracts in the Central African region would make owners of property to be assured enough to engage in activities of the envisaged large economic zone. Additionally if investors’ rights are protected constitutionally and with sound legislative instruments and local institutions, this will equally make them trust the envisaged large economic zone.

State protectionism needs to be dismantled for free markets to strive in Africa. Trade and tariff barriers need to be lessened to enable the free circulations of goods and services between African states. State intervention in the economy should be restricted by giving more economic freedom to individuals to consume, produce, and exchange.

Redressing the issue of inflation for free trade in Africa is thus important. Hence the need for sound monetary policies and the guarantee of the independence of monetary policies from political authorities is germane.

Several African states have to ensure that there are adequate infrastructure and logistics services in place to make sure the laudable FTA initiative does not fail. States like Mali and Benin need to invest in road infrastructure most especially.

It is vital for the governments to strengthen security and intelligence because this aspect on its own helps to reduce insecurity and insurgency brought about by high level of criminality such as terrorism. Investors will be reluctant to take advantage of a large economic bloc because they do not see how their human and capital resources can be protected. This then acts as a setback in an effective large economic zone for investors.

Chofor Che is an integral part of the Africanliberty’s Voice of Liberty initiative. He is an analyst at and Audace Institut Afrique. He is equally co-founder and chair of the Central African Centre for Libertarian Thought and Action (CACLiTA). This article was originally published at on 8 June 2015. He also blogs at