For Africa to fully realise the promise of the African Continental Free Trade Area (AfCFTA), the movement of goods, services, people and investment across borders must become increasingly seamless.
But as countries open their markets to greater continental competition, a difficult question remains: how do governments protect and strengthen local businesses without undermining the principles of free trade they have committed to?
Trade expert Louis Yaw Afful says the answer lies in building competitive domestic industries while making proper use of the flexibility already provided under the continental trade agreement.
Speaking in an interview with The High Street Journal, Afful said African governments must be careful not to hide behind “national interest” to introduce measures that undermine their commitments under AfCFTA.
He said countries have legitimate room to protect sensitive sectors and build domestic capacity, noting that the agreement does not require every product and sector to be liberalised at the same pace.
Under the AfCFTA tariff liberalisation framework, 90% of tariff lines are to be liberalised, while 7% can be designated as sensitive products and liberalised over a longer period. A further 3% can be excluded from liberalisation, subject to the conditions of the agreement.
Afful said this flexibility gives governments room to protect vulnerable sectors while gradually preparing domestic businesses to compete.
The challenge, he said, is for countries to use the mechanisms available under AfCFTA rather than simply invoking national interest to impose restrictions that fall outside their commitments.
Industrialise and add value
According to Afful, the first priority for African governments should be to strengthen domestic productive capacity through industrialisation and value addition.
He argued that African countries cannot sustainably protect local businesses if those businesses remain dependent on the export of raw materials and the import of finished products.
Rather, countries must develop the capacity to process their raw materials, manufacture products locally and move into higher-value areas of production.
According to him, adding value to raw materials and producing specialised goods would allow African countries to command the terms of trade and strengthen their position in global markets.
He said Africa’s ability to compete under AfCFTA will ultimately depend on whether its businesses can produce goods and services that are competitive beyond the protection offered by national borders.
The trade expert therefore urged governments to prioritise manufacturing and industrialisation rather than using market restrictions as the primary tool for protecting domestic businesses.
Keep politics out of trade
The second issue Afful highlighted is the need to limit political interference in trade.
He cautioned governments against allowing domestic political pressures, including hostility towards foreign businesses, to dictate trade policies.
While governments have a responsibility to protect their economies and domestic enterprises, he said restrictions must be implemented within the framework of existing trade commitments.
Afful pointed to instances of political interference and tensions involving foreign businesses in some African countries as a concern, warning that actions taken against businesses from one country could provoke retaliatory measures from another.
“If one country pushes out businesses, the other country can also retaliate,” he warned.
Such a cycle, he said, could undermine efforts to deepen intra-African trade and weaken the broader objective of creating an integrated continental market.
For Afful, governments can protect their national interests, but must do so through legitimate trade policy rather than political intervention that disregards agreed rules.
Review difficult commitments, don’t ignore them
Afful’s third recommendation is for governments to use the mechanisms within AfCFTA when particular commitments become difficult to implement.
He said countries that believe certain provisions are affecting sensitive domestic sectors should return to the negotiating table and seek a review rather than simply imposing restrictions outside the agreed framework.
AfCFTA was designed to allow countries to liberalise their markets progressively rather than remove all protections at once.
The 90%, 7% and 3% structure, according to Afful’s argument, gives countries space to identify sensitive sectors, provide them with additional time to adjust and, where permitted, exclude a limited number of products from liberalisation.
He said governments should therefore take advantage of these provisions when necessary instead of using unilateral restrictions that could undermine confidence in the continental market.
Where existing commitments create genuine difficulties, he said, governments should engage through the appropriate AfCFTA processes and negotiate changes.
Protecting businesses without undermining AfCFTA
The debate over restrictions on foreign businesses in some African countries has brought the tension between domestic protection and continental integration into sharper focus.
Countries understandably want to create opportunities for their own businesses, protect jobs and develop domestic industries. But excessive protectionism could also deprive local businesses of the competition, investment and larger markets needed to become more productive and competitive.
For Afful, the solution is therefore not to choose between protecting local businesses and promoting free trade.
Instead, African governments must industrialise and add value, keep political considerations from distorting trade policy, and use AfCFTA’s institutional mechanisms to review difficult commitments when necessary.
The success of AfCFTA, he argued, will depend not only on removing barriers to trade but also on whether African countries use the integration process to build industries capable of competing within the continent and beyond.
