The African free trade plan is significant move in the continent’s pursuit of economic integration, President Cyril Ramaphosa has said.
Speaking at the opening address of the Financial Times Africa Summit in London on Monday – a gathering of investors, business people and decision makers – Ramaphosa said the free trade plan would develop a single market of 54 nations, with 1.2 billion people and a combined GDP of $3trn.
Ramaphosa spoke of investment opportunities in Africa, which he said were being enhanced by the African Continental Free Trade Agreement. He said the agreement was the realisation of the dreams of the founders of the African Union, 56 years ago, comparing it to the Maastricht Treaty of 1992, which represented a new era of integration in Europe.
Ramaphosa also said Africa would learn lessons from the EU. “We have been learning from others in the past and we will learn from the mistakes they continue to make, as they undo [those of] the EU and a few others,” Ramaphosa said.
“We want to learn from what they are doing and not doing correctly. I want to assure you, our union will be much more durable than what we can see around [us],” Ramaphosa said.
His comment was met with chuckles from the crowd present. The EU and UK are currently engaged in talks for the latter to leave the union.
His remarks also follow xenophobic attacks against foreign nationals, including Nigerians, in Gauteng. Nigerian President Muhammadu Buhari earlier this month visited South Africa, where both countries agreed to leverage off the African Continental Free Trade Agreement and strengthen trade ties following the violence, Bloomberg previously reported.
More investment, less foreign aid
In his address, Ramaphosa continued to promote the readiness of the African continent as a destination for investment. Through the integration of markets, enabled by the agreement, the case for investing in Africa has become stronger, he said.
“Africa is ready to partner with investors and the private sector because it’s been proven many times over and in numerous countries that discerning investors who have the foresight to invest in Africa can earn good returns,” he said.
“We have reached a moment in our history where Africa needs investment more than it needs foreign aid,” he added.
Ramaphosa said African leaders were now focusing on growing their economies and improving intra-Africa trade, as opposed to being fixated on politics, as was observed in the past.
The free trade plan is expected to boost intra-African trade from 15% to 25% by 2040. Intra-African trade is low compared to 47% reported in the Americas, 61% in Asia and 67% in Europe.
Ramaphosa also emphasised the benefits of the free-trade plan in growing small and medium businesses, ensuring the free flow of goods and services as well as people. The plan has the potential to improve the manufacturing and industrial capabilities on the continent, he added.
“The removal of trade barriers will lower prices and benefit consumers. Business costs will be reduced and business efficiency will be raised,” he said. He even suggested the free trade agreement would help reduce potential conflict between trade partners.
Ramaphosa will take the lead as chair of the AU next year. SA will emphasise giving effect to the agreement, he said.
Invest in infrastructure, not arms
Ramaphosa also said the development of Africa is being threatened through interference by external powers, particularly using parts of the continent as “theatres of war”.
“Foreign money that buys the weapons used in theatres of war on the African continent should instead be building bridges, ports and rail lines, schools, hospitals and clinics,” Ramaphosa said.
He urged the investor community to take advantage of the “climate of reform” sweeping across the continent. “There has never been a better time to invest in Africa,” he said.