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The Prospects and Challenges of the Proposed African Free Trade Zone (Aftz): a Search for a New Theory

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The Prospects and Challenges of the Proposed African Free Trade Zone (Aftz): a Search for a New Theory Global Advanced Research Journal of Management and Business Studies (ISSN: 2315-5086) Vol. 3(4) pp. 144-154, April, 2014 Available online http://garj.org/garjmbs/index.htm Copyright © 2014 Global Advanced Research Journals Review The Prospects and Challenges of the Proposed African Free Trade Zone (Aftz): A Search for A New Theory Okeke V.O.S PhD Department Of Political Science, Faculty Of Social Sciences, Anambra Sate University, Nigeria, West Africa Email: [email protected] +2348033847373, +2348026042793 Accepted 17 April 2014 The African Free Trade Zone (AFTZ) is a free trade zone announced at the EAC-SADC-COMESA Summit on Wednesday 22 October 2008 by the heads of Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA) and the East African Community (EAC). The African Free Trade Zone is also referred to as the African Free Trade Area in some official documents and press releases. In May 2012 the idea was extended to also include ECOWAS, ECCAS and AMU (Africa free trade zone in operation by 2018). The announcement of the Tripartite Summit of Heads of State and Government of member states of East African Community-Southern African Development Community- Common Market for Eastern and Southern Africa, EAC-SADC-COMESA, to establish an African Free Trade Zone (AFTZ) has been greeted with optimism in many quarters, and as such hailed as a welcome development. This optimism concerning the prospects of the proposed AFTZ, though often exaggerated, is not totally unfounded as it could help African Economic Community (AEC) strengthen intra-Regional Economic Communities, RECs, and inter-RECs integration by reducing the incidence of multiple memberships and proliferation of regional economic groups and subgroups. This paper, however, argues that the proposed AFTZ would be confronted with some potential challenges capable of, not just hindering, but torpedoing these prospects. The study is essentially prognostic. The Thrust of this paper is to exam the prospects and challenges of the proposed African free trade zone (aftz): the search for a new theory. Keywords : African, Free Trade Zone, Theory INTRODUCTION Free trade area or zone is an area or a zone where there 2008; Aniche, 2009). Free trade area is, thus, part and are no tariffs or other restrictions on movement of goods parcel of regional economic integration, and in fact a and services across borders usually representing the first stage or a phase in the strategies and aims of African stage in the economic integration. Other stages include Economic Community (AEC). This is perhaps what the customs union, common market, and economic and heads of government and state of member states of East monetary union. States located within the free trade area, African Community (EAC), Southern African that is, the member states enjoy duty-free trade relations Development Community (SADC) and Common Market between/among themselves (Goldstein & Pevehouse, for Eastern and Southern African (COMESA) had in mind Okeke,145 when they, apparently worried by the dwindling prospects and the whole of African continent rather than a trade of regional economic integration in Africa, convened a zone for the benefit of Great Britain. Another important tripartite summit on October 22, 2008 to float a free trade difference between the two is that the AFTZ area to be known as African Free Trade Zone (AFTZ). encompasses an area greater than the one even Cecil The EAC-SADC-COMESA Summit is considered Rhodes could have imagined. Cecil Rhodes’ Cape to historic because for the first time since the birth of the Cairo would have involved at most a dozen countries African Union (AU), several key building blocks of the while the current Cape to Cairo zone under the AFTZ African Economic Community (AEC) have met on how to encompasses most of Africa, almost half of the African integrate territories and move towards deepening and countries (i.e. 26 out of 54) representing more than half of widening integration within the framework of the Abuja the production, trade, population, landmass and Treaty for the establishment of the African Economic resources of the entire African countries Community (AEC). Furthermore, for the first time a truly (http://en.wikipedia.org/wiki/African_Economic_Communit transcontinental union came into being ranging from the y, retrieved on 9/3/2009 ). North to the South of the continent (Joshua, 1989; The proposed African Free Trade Zone (AFTZ) is likely Ezeanyika, 2006). Not much has been written on the to be made up of 26 member states namely; Angola, proposed African Free Trade Area, but not a few believes Botswana, Burundi, Comoros, Djibouti, Democratic that it has a lot of prospects, while there are many who Republic of Congo, Egypt, Eritrea, Ethiopia, Kenya, think that there are yet a number of challenges that may Lesotho, Libya, Madagascar, Malawi, Mauritius, confront or even preempt. It is within this context that we Mozambique, Namibia, Rwanda, Seychelles, Swaziland, pose this question: South Africa, Sudan, Tanzania, Uganda, Zambia and • Are the challenges that confront the proposed Zimbabwe. All the aforementioned African countries are African Free Trade Zone (AFTZ) capable of hindering or members of one, two or three of these following existing swallowing its prospects? regional economic organizations, namely, East African To address this question, we partition this paper into Community (EAC), Southern African Development parts, namely, introduction, the proposed African Free Community (SADC) and Common Market for Eastern and Trade Zone (AFTZ), the prospects of the proposed Southern Africa (COMESA), and even other regional African Free Trade Zone (AFTZ), the challenges of the economic organization in Africa and beyond. At this proposed African Free Trade Zone (AFTZ), the search for juncture we will make brief comments on the above a new theory, and conclusion and recommendations. regional economic organizations as part and parcel of the regional economic communities (RECs) of the African Economic Community (AEC). This will place our The Proposed African Free Trade Zone (AFTZ) argument in a proper perspective. The African Free Trade Zone (AFTZ) announced at the EAC-SADC-COMESA Summit is the realization of a The East African Community (EAC) dream that has been for more than hundred years in the making. A trade zone envisioned then to span the length The East African Community (EAC) is the regional and breadth of the African continent from Cape to Cairo; intergovernmental organization of the republics of from North African Egypt all the way to the Southernmost Burundi, Kenya, Rwanda, Uganda and Tanzania with it tip of Africa, Cape Town in South Africa. The Cape to headquarters in Arusha, Tanzania. The treaty for the Cairo dream was envisioned by Cecil Rhodes and other establishment of the East African Community (EAC) was British imperialists in the 1890s, and was expressed in signed on November 30, 1999 and entered into force on different contexts and versions including, but not limited, July 7, 2000 following its ratification by the original three to the following ideals: Cape to Cairo Road, Cape to members, viz , Kenya, Uganda and Tanzania for its Cairo Railway, Cape to Cairo Telegraph and Cape to reestablishment. Rwanda and Burundi later acceded to Cairo Trade Union the EAC treaty on June 18, 2007 and became full (http://en.wikipedia.org/wiki/African_Economic_Communit members of the Community with effect from July 1, 2007. y, retrieved on 9/3/2009 ). The East African Community (EAC) was originally While other powers, notably Germany and Portugal that established in 1967, however, disagreement between the had colonies and/or spheres of influence in the Cape to founding members led to its collapse. On its Cairo trade zone, contemplated; the primary benefactor reestablishment on November 30, 1999, the new EAC of the Cape to Cairo Union would have been the Great established a customs union in 2005 and is working Britain and the British Empire. The difference in the idea towards establishment of a common market by 2010; of the initial Cape to Cairo zone and its current subsequently, a monetary union by 2012 and ultimately a incarnation is that the African Free Trade Zone (AFTZ) is political federation of the East African states the creation of African states for the mutual benefit and (http://en.wikipedia.org/wiki/African_Economic_Communit development of the AFTZ member states, their peoples y, retrieved on 9/3/2009 ). The East African Community 146 Glo. Adv. Res. J. Manag. Bus. Stud. (EAC) has a combined population of approximately 120 n_and_Southern_Africa , retrieved on 11/1/2004 ; million people, land area of approximately 1.85million http://.www.comesa.int, retrieved on 7/22/2009). square kilometres and a combined gross domestic Perhaps with the exception of Angola, Botswana, product of $466 billion in 2006. For details see table 1 Lesotho, Mozambique, Namibia, South Africa and below. Tanzania, COMESA encompasses all other member states of EAC and SADC. It is, therefore, only seven of member states of EAC and SADC that are not COMESA The Southern African Development Community members. The COMESA has a combined population of (SADC) approximately 398 million people in a landmass of approximately 12.87 million square kilometres, and a The Southern African Development Community (SADC) combined gross domestic product of approximately was formed in Lusaka, Zambia on April 1, 1980 as a $286.7 billion in 2006. For details see table 1 below.
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