Africa inks its own trade deal – by South African H.C. Sibongiseni Dlamini-Mntambo and Cameroon H. C. Solomon Azoh-mbi

There is a second rush to Africa. This time, it is not the imperial rush that led to the partition of the continent in 1884 among Europe’s big powers. Instead, the second rush is for mutually beneficial partnerships with a continent now increasingly seen as the next frontier of global progress and prosperity.

Africa’s economic growth continues to strengthen, with a GDP of 3.8 per cent in 2018 and 4 per cent in 2019. IMF forecasts put GDP growth at 4.1 in 2020. Half of the world’s fastest growing economies are in Africa, with 20 projected to expand at an average rate of 5 per cent or higher.

Three factors account for the growing positive trends in Africa — potential, people and policies.

First, despite centuries of plunder, Africa continues to be endowed with enormous and diverse natural resources. It boasts 90 per cent of the world’s platinum and cobalt reserves and 50 per cent of global gold reserves, two thirds of the world’s manganese reserves, 35 per cent of uranium and 75 per cent of global coltan, which is used in electronic devices such as mobile phones. It has 10 per cent of the world’s oil and gas reserves and 60 per cent of the world’s arable land.

Second, Africa’s growing population is essentially youthful and dynamic, educated and enterprising. This offers an attractive market for foreign goods. However, Africans are themselves increasingly seizing opportunities to tap and transform the continent’s natural and human resources into marketable goods and services.

Third, policies decisively taken over the last few decades by governments across the continent have led to remarkable improvements in African institutions that deal with political governance and economic management. These governments have also made significant investments in modern infrastructure — ports, airports, roads, railways and telecommunication networks, for example — and they’ve also invested heavily in human development.

One pivotal policy adopted by African leaders is the establishment and entry into force on May 30, 2019 of the African Continental Free Trade Area (AfCFTA). African Development Bank president Akinwumi A. Adesani describes it as “the most significant decision by African leaders” and adds that it “shows their willingness to move forward with Africa’s economic integration.”

If successfully implemented, the UN Economic Commission for Africa (ECA) estimates the AfCFTA has the potential to increase intra-African trade by 52 per cent by 2022; increase demand for goods and services fivefold; and lift 250 million people into the global middle class by 2050. Currently, very little African trade is done between Africans, so this is an important goal.

A borderless Africa lays the foundation for a competitive continental market of 1.2 billion people with a combined GDP of more than $3.4 trillion. It will allow industries to develop across borders, creating economies of scale for investors, fostering competition and supporting the growth of SMEs and large African conglomerates. According to the 2019 African Economic Outlook Report, it also has the potential to improve regional security.

Africa’s open continental market offers Canada and the world unparalleled opportunities and avenues for developing commercial, industrial and technological partnerships in diverse sectors such as trade, infrastructure development, digital transformation, research and capacity-building, to name a few.

Much of the world recognizes this and many countries are putting in place policies and strategies to improve and advance bilateral relations with Africa. To cite a few examples, Europe has a long-standing multilateral framework for an African Union-European Union Partnership. In addition, in 2000, the Cotonou agreement replaced the 1975 Lomé convention and now forms the legal basis for relations with sub-Saharan African countries together with Caribbean and Pacific countries. Further, a Joint Africa-EU Strategy (JAES) was adopted by African and European heads of state in Lisbon in 2007 to serve as a political framework for steering relations with the whole of Africa. And, at the EU-Africa Summit in 2014, a new framework within JAES was adopted for co-operation in five major areas.

Most of Canada’s allies in the G7 and G20 have seen the need for initiating bilateral platforms for regular consultations on co-operation, trade and investment with the African continent. This continental approach to harnessing relations with Africa is gaining widespread appeal and momentum.
France held a Franco-African Summit way back in 1973. Japan launched the Tokyo International Conference on African Development in 1993. In 2000, China held the Forum on China-Africa co-operation. In 2006, the Korea-Africa Economic Co-operation was established. Two years later, the India-Africa Forum Summit took place and convenes rotationally between India and Africa once every three years.

In 2014, then-U.S. president Barack Obama hosted 50 African states in a U.S.-Africa Leaders Summit focused on trade, investment and security. While this initiative is not an ongoing process like some mentioned above, the U.S. nevertheless has other templates, such as the African Growth and Opportunities Act initiative aimed at promoting trade and investments with all of Africa; the Obama administration’s Power Africa initiative, the Millennium Challenge Account and private sector-led initiatives such as the U.S.-Africa Business Summit, organized periodically by the U.S. Corporate Council on Africa.

In 2016, Italy initiated the Italy-Africa Conference of its foreign ministry, to co-ordinate co-operation with Africa in the areas of peace, freedom, democracy and security. During its presidency of the G20 Summit in 2017, Germany established a bilateral platform called “Compact with Africa.” At its second edition in Berlin on Nov. 19, 2019, German Chancellor Angela Merkel insisted to German businesses that “we should do everything to co-operate with Africa, not to talk about Africa, but to do something together.” More recently, in October 2019, Russia held its own first Russia-Africa Summit with more than 40 African heads of state in attendance. In January 2020, Britain is poised to host the U.K.-Africa Investment Summit in London.

Other major countries, including Australia, Brazil and Turkey have similar bilateral organizations for promoting economic and business ties with Africa.

Canada is lagging behind in this growing momentum to build strong and strategic partnerships with Africa. Canada’s presence on the continent is largely limited to the narrow niche mining sector. This approach is markedly different from current trends and does not allow for the full bloom of Canada-Africa relations. There is need for clarity in Canada-Africa relations, for a more coherent Canada-African trade investment policy and for the establishment of a bilateral platform for Canada-Africa co-operation. There is no better time than now, with the second Trudeau government having just been sworn into office.

Writing on the subject in 2013, Johannesburg academic David Hornsby argued that “Canada needs a more consistent and coherent strategy for engaging with Africa.” This call is as valid today as it was years ago, and has been repeated by African diplomats accredited to Canada with little or no response.
It is difficult to understand Canada’s ambivalence toward Africa, especially against the backdrop of all the rumblings about the rush to Africa by the rest of the world. Yet more than any other country, this country offers some singular advantages that greatly favour the strengthening of its engagement and competitiveness in Africa as illustrated hereafter.

Canada and Africa share linguistic and legal affinities as English and French are widely spoken. The common and civil laws widely practised in Canada are also prevalent in Africa. Canada carries none of the “imperial baggage” that can be an impediment to healthy relations. There are shared commonalities in diversity and multiculturalism; and there is shared membership within international organizations including the United Nations, the Commonwealth and La Francophonie.

The stage is sufficiently set for business in a new relationship with Africa, beyond aid. Canada has signed foreign investment protection agreements with about 20 African countries. These should give Canada an advantage in building mutually beneficial business partnerships with countries of the African Common Market.

In an article appearing in The Globe and Mail on June 7, 2019, Hill & Knowlton’s senior vice-president, Jack Hughes, insightfully observes that the African Continental Free Trade Area has “the potential to be the most dynamic trade bloc of the 21st Century”… offering “mammoth trade and investment opportunity.” He further argues that “if Canada has any ambition to secure an ’early-mover’ advantage within the AfCFTA integrated market,” it must “adopt a ‘breadth and depth’ strategy to make up that lost ground. Canada’s private sector and public service must work together to seize opportunities that strengthen economic ties with AfCFTA countries individually with the goal of engaging them collectively.”

The potential and promise of the continent have led some pundits to talk of the “African Century.” This in no way minimizes the challenges that persist, but to persistent challenges, Africa is responding with persistent courage, creativity and commitment. The old narrative of an Africa of conflict and chaos is giving way, and quickly, too. This is an opportune moment for Canada to rethink Canada-Africa trade. Africa is ready.

This article was first published in The Diplomat online magazine on 2nd January 2020.