World

Africa Tries Free Trade

Liberal ideas are beginning to gain traction on the world's poorest continent.

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Economic nationalism has plagued Africa since decolonization. In 2021, that is set to change.

On January 1, the long-awaited African Continental Free Trade Area (AfCFTA) came into effect. Aside from the economic benefits that the arrangement will bring to the continent, Africa's newfound support for free trade and liberalization marks a clear rejection of the socialist ideology that has tormented African politics for decades.

As it stands, 36 of the 55 African Union (A.U.) nations, including the regional economic powerhouses of Nigeria, South Africa, and Egypt (which together make up a third of the continent's economy), have ratified the free trade area. Another 18 nations have indicated their support by signing the trade agreement and are expected to become full members soon. So strong is the appetite for free trade in Africa that Eritrea—often dubbed "Africa's Hermit Kingdom"—is the only nation on the continent that remains reluctant to support the agreement.

Eritrea may eventually reconsider. Within 5–10 years, the AfCFTA will ensure that 90 percent of tariffs on goods traded between member states will be abolished. Within 13 years, 97 percent of all tariffs will be removed. By 2035, the World Bank has predicted, this enormous liberalization effort will boost Africa's gross domestic product by $450 billion, increase wages for both skilled and unskilled workers by 10 percent, and lift more than 30 million people out of extreme poverty, defined as living on less than $1.90 per day. According to the same estimates, by 2035, the AfCFTA will see more than 68 million people rise out of moderate poverty, defined as living on $1.90–$5.50 per day. The "countries with the highest initial poverty rates," the World Bank says, will see the "biggest improvements."

The likely economic benefits of the AfCFTA are impressive. These rapid gains are ultimately a consequence of diverging from the economic nationalism that has kept much of the continent impoverished.

Africa's turbulent relationship with socialism began in the late 1950s and early 1960s, when a plethora of newly independent states rejected the capitalist model. Many of the new leaders viewed capitalism and colonialism as synonymous. "In rejecting the capitalist attitude of mind which colonialism brought into Africa," Julius Nyerere, the first president of Tanzania, said in 1963, "we must reject also the capitalist methods which go with it."

In 1957, Ghana became the first African nation to achieve independence. Its leader, Kwame Nkrumah, a self-proclaimed "Marxian socialist," suggested that only a "socialist transformation would eradicate the colonial structure of Ghana's economy." Before long, Nkrumah was encouraging other African states to seek independence so that they, too, could pursue the "complete ownership of the economy by the state."

Many African leaders followed Ghana's example. Sékou Touré of Guinea pursued "Marxism in African clothes," banning all commercial activities not approved by the government. In Tanzania, the new constitution established the nation as a "socialist state" and pledged to "prevent the accumulation of wealth." Léopold Senghor, the first leader of Senegal, said that after independence, Senegal would be guided "by Marx and Engels."

The infatuation with socialism among Africa's intelligentsia has meant that much of the continent's economy has been mangled by central planning. For decades, debilitating policies such as price and wage controls, expropriation of private property, and inefficient state-owned enterprises were ubiquitous. The dev-astating human and economic costs imposed by these policies have filled the pages of many books.

As Free Africa Foundation President George Ayittey notes, the continent's continuous love affair with socialism led to nothing but "economic ruin, oppression, and dictatorship." Thanks to Africa's recent turn toward liberalism, this abusive relationship may finally be over.

To highlight just how drastically outlooks have changed on the continent, it is worth comparing the A.U. to its predecessor, the Organization of African Unity (OAU). The OAU was set up in 1963 by Nkrumah, Nyerere, and several other socialist leaders. Nkrumah believed that "a united socialist Africa is a necessary condition for the realization of the African personality." The organization's founding members argued that the continent could prosper only by uniting behind socialism, rejecting the capitalist system, and disconnecting from the global economy. The OAU therefore was guided by a philosophy of "African socialism."

By contrast, the A.U. has just implemented the world's largest free trade area. In 2018, when the AfCFTA was introduced, Rwandan President Paul Kagame, then the union's chairperson, described himself as an avid free-trader and an ideological disciple of Lee Kuan Yew, the first prime minister of free-trading Singapore. Similarly, the A.U.'s current chairperson, South African President Cyril Ramaphosa, has proclaimed that free trade will "unleash Africa's economic potential."

While there's little doubt that socialism will continue to haunt some parts of the continent, it's clear that, with the AfCFTA supported by 54 of the 55 A.U. member states, liberal ideas are beginning to gain traction on the world's poorest continent. As African countries begin to embrace free trade, we can expect tens, if not hundreds, of millions of Africans to rise out of poverty in the coming years.

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  1. Jesus, what an idiot. Africa is not the poorest continent, it’s the richest continent. Unburdened by such Eurocentric thinking such as economic wealth is the only way to measure wealth and the white supremacist colonialist thinking that being rich is better than being poor, Africans have a plethora of wealth in their oneness with Nature. The lack of electricity and running water, the anticipation of not knowing where your next meal is coming from, the simple enjoyment of watching your children die for lack of modern medicine, all of these things create a wealth of experiences that cannot be measured in the white man’s numbers. But believe me, Africans (at least the African-American Africans) are aware that they have an immeasurable wealth that cannot be taken from them.

    1. Not to mention that these societies have populations and leadership dominated by not-white people. They are living truly authentic and woke lives. Lucky them!

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    2. While you blather, China is investing tens of billions of $US in African infrastructure projects.

      “Africans (at least the African-American Africans) are aware that they have an immeasurable wealth”

      They believe in a better future. You can’t get very far without that, as Americans are finding out.

  2. Africa is the world’s poorest continent, huh? How unfortunate for the Black bodies living there.

    Of course Koch / Reason libertarianism has the answer: we should invite the entire African population to immigrate to the US. Not only is this the humanitarian thing to do, it would also greatly expand the labor force available to our billionaire benefactor Charles Koch.

    #OpenBordersWillFixEverything

    1. This free trade agreement also includes free movement between the countries, which will likely decrease the need for Africans to move outside the continent as they’ll have more options to move to comparatively richer countries nearby.

      So don’t worry, the negroes won’t be storming your precious land en masse. You can tell your fellow alt-righters to rest assured.

      1. Fuck off screech.

        1. You know I’m not doing that. And just for this comment, I’ll be coming here more often just to piss you off.

          1. “I’ll be coming here more often just to piss you off.”

            The way of the troll; flag and refresh, it literally kills them to be so ignored.

          2. I’d rather be pissed off than pissed on…unless you’re into that.

  3. This is good news.

  4. Does the “C.R.” stand for “impossibly pretentious douchebag”?

  5. I actually had no idea Socialism was so openly embraced in Africa. But good for them; the first step toward prosperity is quite straightforward, then

  6. “An ideological disciple of Lee Kuan Yew, the first prime minister of free-trading Singapore” doesn’t seem so promising. A mixed bag, at best.

    1. Based Kagame. Seriously though I think Singapore is a great economic model. Later after Africa has accumulated wealth and grown prosperous they can start exploring luxuries like democracy and the welfare state.

      1. Except that Singapore bans chewing gum! That just creates a black-market in Extra and leads to Hubba-Bubba deals gone bad. Then you get people OD-ing on Freedent injected with Everclear!

        They’ll take my Juicy Fruit when they pry it from my cold, dead dental work!

  7. The first thing they need to do is raise taxes. It’s a sure fire way to grow an economy.

    1. And raise the minimum wage? Less than $1.90 a day? Don’t they know they can just pass a law to make themselves 15x richer?

  8. I’ve said for years that if Africa ever gets free trade and free markets it will become the biggest economic powerhouse. My guess is that’s why Europe has kept it shackled for so long.

    Asia could too if it would unshackled itself from all the strange economic policies its various nations have. India could dominate the continent if only it didn’t keep lapsing into that weird nationalist mercantilism.

    And of course, so could North America. We used to be there. But in an effort to make ourselves grate again we shoved free trade and free markets through a woodchipper. We’re just coasting on the momentum of the last century.

    Want to make America great again? Free trade. Free markets. That means NO TARIFFS. NO CRONYISM. CUT SPENDING.

  9. “My guess is that’s why Europe has kept it shackled for so long”

    With leaders like Robert Mugabe, Julius Nyerere, Kwame Nkrumah, Sékou Touré, Léopold Senghor, Idi Amin [body count around 500K], Jean-Bedel Bokassa, Joshua Blahyi, Jean Kambanda [overseeing the slaughter of 800K in Rwanda], Charles Taylor [no piker, her is attributed with the slaughter of over 200K in LIberia], Thomas Lubanga [a relative piker, he only killed around 60K], Bosco Ntanganda [matching Kambanda with 800K deaths to his name], Omar Hassan Ahmad Al-Bashirlus [Sudan, body count 300K] endemic corruption along with its adherence to totalitarian al la “socialism” and central planning, Africa has managed to shackle itself quite nicely for the past 60 years. Europe didn’t do anything but pull out after all of these nations declared independence in the 60s and immediately devolved into a hell hole.

    1. In a sense, they are shackled by Europe…by the pre-Adam Smith ideas of Mercantillism and Cronyism, by the ideas of Marx and Engels, and (in the case of Idi Amin Dada and Anwar Sadat,) the ideas of Hitler.

      Africa is also shackled by the native superstitions of Animism and the imported Abrahamic Religions of Christianity and Islam. A good dose of rational, scientific thought imported from the Charvaka/Lokayata Schools in India, the pre-Socratic and Socratic thinkers of Ancient Greece, the Chinese scientist Mo Tze, Middle Eastern skeptics Abu Sina, Ar Razr, and Omar Khayyam, and European Renaissance/Enlightenment thought will all put Africa on a path to progress.

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