ACFTA: Bridging fault lines in African air transport policy

 

ACFTA and the Single African Air Transport Market (SAATM) still have a long way to go for effective implementation. WOLE SHADARE writes that the AU needs some institutional reforms to ensure that this plausible paper initiative becomes a reality

Colonial demarcation

Africa is home to half of the 32 landlocked developing countries that face special challenges associated with their lack of direct territorial access to the sea resulting in high transport and transit costs.

The African Union is gradually making great strides towards achieving and making sense of the wisdom behind this famous adage in its efforts to liberate Africa from colonial demarcations.

Apart from the physical barriers put in place by Africa’s colonizers, there are other intangible barriers, which have been existing and still continue to be of great hindrance to Africa’s emergence if not brought down.

The African Union’s recent actions of putting into place an African Continental Free Trade Area – ACFTA and the Single African Air Transport Market – SAATM are giant steps towards recognizing the over 1.3 billion inhabitants in the continent as one people, one market, one geographical space, and one nation, provided Africans see and reason into this together.

According to the United Nations Economic Commission for Africa, the African Continental Free Trade Area goes beyond free trade in a broader sphere to establish free movement and investments across Africa.

 

Some existing Nigerian airlines

Historic moment

In March 2018, at the historic meeting of the African Union in Kigali, Rwanda, member states agreed to create an African Continental Free Trade Area. Subsequently, 52 of 54 African Union member states signed up to the agreement, representing a remarkable degree of consensus across the continent.

Following an opinion poll survey carried out in November 2018 by the Rockefeller Foundation, over 2000 citizens across the continent confirmed that an impressive 77% of Africans believe that the Continental Free Trade Area Agreement represented an important step forward.

But what does this agreement exactly mean in practice and how will it affect us, especially with regards to the aviation sector in Africa?

The first thing to point out is, it isn’t simply a ‘Free Trade Agreement’ it’s actually much more than that. It is about establishing a unified continental market, including the free movement of labor and investments.

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To make this happen, the physical movement of people and goods can’t be ignored. In fact, it is the principal catalyst that will act as evidence of the existence of a free trade zone.

Therefore, aviation practitioners and the sector as a whole cannot be ignored. Serious considerations have to be given and put in place by governments, civil society, and regional institutions to assist and resolve all aspects hindering the aviation sector to thrive for full and better implementation of ACFTA and SAATM.

Benefits of ACFTA

Let us focus on three major benefits of the Continental Free Trade Area. Africa is a big continent. You could fit the US, China, and Europe into the continent and still have space to spare. But in economic terms, individual countries are still very small. Take Ghana and Rwanda for instance, these are some of the fastest-growing economies in the world. But in terms of size, they’re ranked 82nd and 139th respectively, out of 211 economies in the world following the IMF rankings this 2019. This matters because small economies often struggle to attract the most needed investments.

Collectively, the story is very different. The African continent all 54 economies together have a collective Gross Domestic Product (GDP) of $2.5 trillion that making it the 8th largest economy in the world, just behind India.

With 1.3 billion potential customers, it makes the continent much more attractive to investment, both from within and from outside the continent. This will encourage business people to make the required investments necessary to sustain economic growth and create the job opportunities the continent badly needs.

However, for this to transcend into tangible physical actions on the ground, going beyond paper agreements, we need to absolutely improve the conditions and means of intra-Africa connectivity to enable for smooth and seamless movements amongst these economies for business to happen and thrive, hence the unavoidable contribution of the aviation sector.

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The second argument in favor of the Continental Free Trade Area is that it includes a protocol on the Free Movement of people. This seriously matters because, at present, traveling between African countries for Africans currently can be very challenging.

 

Aircraft positioning for take-off

Bottlenecks

Sometimes it is easier to obtain a visa into certain European, Asian, Middle East countries than acquiring as an African a visa to travel into another African country, worst still within the same regional economic bloc.

One remembers vividly Africa’s richest man Aliko Dangote’s experience after being awarded an African passport by the African Union, still required a visa to enter an African country using an African passport as he described in his interview with Mo Ibrahim in 2019.

Visas, expensive air tickets, custom clearances, and border controls make it difficult to travel for pleasure and even more difficult to do business across borders. Currently, there are a lot of trained and skilled people across the continent coming out of schools, universities, and colleges who cannot find work. If free movement is endorsed, people will be able to use their talents anywhere in the continent where there is a demand for those talents. The continent will be your oyster.

A third powerful argument in favor of the Continental Free Trade Area and its contributions and impact to the aviation sector is that it will increase trade between African countries, especially as we strive to put in place the right airlines to enable movements.

 

Some African airlines

Protectionism

While free trade introduces multiple benefits for participating countries, there are also costs associated with the transition to a more liberalized trading framework. Major concerns include the uneven distribution of benefits from free trade and a lack of preparedness for heightened levels of market competition, sparking some calls for protectionism.

Nigeria’s hesitation to sign the AfCFTA agreement and the closure of its land borders serve as prominent examples of such opposition to liberalization. In October 2019, the country closed its land borders to all movement of goods in a move aimed at curbing rice smuggling and protecting domestic farmers from cheaper imports.

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This raised concerns over the prospects for further integration and free trade across the region, especially as the border closure occurred just three months after Nigeria signed the AfCFTA deal.

Expert’s view

Air Transport specialist and a former Managing Director of the Federal Airports Authority of Nigeria (FAAN), Mr. Richard Aisuebeogun said with AfCFTA, It becomes easier for airlines to grow in Africa just like what is obtained in the entire continent of Europe.

His words, “There is virtually no part of Europe that you cannot fly into from one particular spot because you have airlines crisscrossing the entire continent of Europe. We know that is not the case in Africa. I don’t want to go deep into that. We have talked about it for over 30 years. The challenge of flying across Africa is a major challenge. If we find it as a major challenge to fly across Africa or within Africa via intra-Africa transport system, then, you can imagine how it is going to limit the economic development of the region”.

Nigerian airlines

 “I keep saying that in all the interviews I have granted and in my presentations in the last two years. We need to have citizens travel cards that enable us to go to South Africa, Banjul, Nairobi, Cairo without any limitations for legitimate reasons to do business that will engender economic growth of Africa and its citizens, business that will create wealth, business that will reduce poverty, business that will reduce unemployment and that is what Africa Continental Free Trade would do and I keep saying it that this can only be successful when we have SAATM to complement, he added.

 Last line

 While the AfCFTA logic relies on the wide set of enabling policies discussed above, the current political attention to the process may itself offer an opening to trigger domestic reforms in some African countries.

Wole Shadare