AfCTA opportunity to grow Africa’s influence in globalisation

Globalisation has not been as robust as it should be and has been slowing in the past decade since the 2008 financial crisis.

This has given rise to the term “slowbolisation”, coined to describe the slowing global trade and commerce. It is also seen as temporary, informed by the view that the march of globalisation is inevitable.

There, however, is a contra view worth delving into that sees globalisation as already dead. It is described in the recent book, The Levelling: What's Next After Globalization by Michael O'Sullivan.

“Globalisation is behind us,” O'Sullivan declares in a recent interview with The Economist under its Open Future initiative.

In the book, he describes a world where the unifying influences of globalisation have given way to multipolar hegemonies or multiple centres of influence.

“A fully multipolar world,” he writes, “[will be] composed of three (perhaps four, depending on how India develops) large regions that are distinct in the workings of their economies, laws, cultures, and security networks.”

The three large regions will comprise of America, the European Union and a China-centric Asia. They are projected to increasingly take very different approaches to economic policy, liberty, warfare, technology and society.

It may very well be that O’Sullivan multipolar world will come to pass, but the scenario should provoke the obvious question about Africa’s place in the equation. Should the continent necessarily fall into any of those spheres of global influence?

Why should the continent not become a pole to reckon with in the said multipolar world?

O’Sullivan suggests two broad axes that the continent would have to fulfil to become such a pole.

First, the poles in the multipolar world have to be large in terms of economic, financial, and geopolitical power.

Second, the essence of multipolarity is not simply that the poles are large and powerful but also that they develop distinct, culturally consistent ways of doing things.

The first axis predicates the second, and Africa’s way of doing things has been far from exemplary as evidenced in cycles of conflict and the many dimensions of poverty.

Clearly, Africa is out of the league. Though it is large, it is not powerful and neither does it have economic and financial heft.

To put globalisation aside for the moment, it is true that Africa has been making some gains and that it could do better, as memorably captured by former US President Barrack Obama at the 2016 U.S.-Africa Business Forum in New York.

“We have so much more work that can be done and will be done,” he reminded the gathered African leaders. “The fact [nevertheless] is that, despite significant growth in much of the continent, Africa’s entire GDP is still only about the GDP of France.”

Note his unvarnished comparison of Africa’s entire GDP to France. In 2014, Africa’s GDP was $2.74 trillion. France’s GDP was up at $2.83 trillion.

Africa’s GDP does not appear to have done any better since then, while available 2018 figures suggest it may even have fallen.

This, however, is not to say that Africa has been sitting on its laurels. Tomorrow, 7 July, the African Continental Free Trade Area (AfCTA) will be launched during the AU Extraordinary Summit of Heads of State and Government in Niamey, Niger.

AfCTA agreement, first signed in Kigali in March 2018, has so far been ratified by 25 countries. Nigeria, the foremost African economy has finally accepted AfCTA’s inevitability and is expected to sign the agreement at the Niamey summit, bringing on board a major West African market.

The continental free trade area rules are now being set with the projection that it will help boost regional trade by 60 per cent within three years. Currently, trade between African nations is only 15.5 per cent.

It is acknowledged that for this to take off, the many outstanding issues affecting intra-regional trade within the regional trade blocs must be done away with, especially in East, West and Southern Africa.

With this, is an the acknowledgement that it is the regions that make the continent; and if intra-regional trade doesn’t work the continental market might as well not be there.

Trade will begin among member states that have already ratified the protocol, comprising half the continent.

With this, AfCTA not only globalises Africa but marks its first steps as the vehicle that could yet move Africa’s position higher in a globalised world, as opposed to a multipolar one.

An analysis on “slowbolisation” early this year in The Economist makes a compelling argument why O’Sullivan’s defunct globalisation thesis may not be feasible.

Far from making it easier to mitigate the downsides of globalisation, a regional world would struggle to solve worldwide problems such as climate change, cybercrime or tax avoidance.

Viewed in the very long run, over centuries, the march of globalisation is inevitable, barring an unforeseen catastrophe. Technology advances, lowering the cost of trade in every corner of the world, while the human impulse to learn, copy and profit from strangers is irrepressible.

The views expressed in this  article are of the author.