Nationalism in the region could derail continental trade bloc

East African economies are growing at an unprecedented rate, but experts warn that strong nationalist and protectionist stances could weaken the implementation of the African Continental Free Trade Area (AfCFTA).

A new report by the United Nations Economic Commission for Africa (Uneca) says rising trading tensions between some East African Community member states have resulted in declines in intra-regional trade, as the bloc now trades at just half of its potential.

The report bases its findings on recent events, including Tanzania’s decision in August to ban sugar imports from Uganda and Burundi’s ban on Rwandan exports in 2016.
“There is increasing protectionism and moderating global demand across the world, so it is important for African countries to focus on their regional ties, which are more resilient and dynamic.

This way, strong regional blocs will allow firms to tap into the rapidly growing markets in other parts of Africa through the CFTA,” said Andrew Mold, acting director of Uneca’s Office for Eastern Africa.

However, whereas trade experts conducting the AfCFTA negotiations are conditioned by their past experience, they tend to more cautious about the treaty than the heads of state who are supposed to be driving the project.

Politicians are criticised for failing to walk the talk even as the majority of populations in the region are communally integrated and in support of free movement and liberal trade.

“How can we implement the AfCFTA when politicians in some EAC countries are holding on to protectionism and nationalism? They think they will lose their power if they let go. I hear them at regional meetings speaking through the lens of nationalism and not as a region,” said Uganda’s Minister of Trade Matia Kasaija last week, at a regional summit in Kigali on the implementation of the CFTA in East Africa.

Cross-border trade

Mr Kasaija said protectionism had undermined cross-border trade and could slow down growth.

“We are performing as the EAC but not as expected. The biggest problem is non-tariff barriers. Some states do not recognise the essence of trading with each other even when they keep talking about the need to do so,” he added.

“For example, Uganda has excess sugar and maize of about five million tonnes, but some of our EAC partners go and import sugar from outside the region. If this can be stemmed, real integration and the CFTA are possible.”

His sentiments were echoed by Rwanda’s Foreign Affairs Minister Richard Sezibera, who shared his experience of protectionist tendencies among member states during his tenure as EAC secretary general from 2011 to 2016.

“One of the frustrations at the EAC is that we knew that every year at some point we would have famine. We also knew that at the time of shortages, we had surplus production elsewhere. But it was impossible to move agricultural products from one country to another,” Dr Sezibera said.

“Countries had put bans on the export of agricultural products during their time of plenty, and then when they were in famine they would remove the ban.

“For example, Kenya at one point had a shortage and Tanzania had a surplus. Tanzania put a ban on export of maize and rice. It did not make sense; so when we asked them why, they said that Kenyans had also put a ban on seed exports, even though Tanzanians import 70 per cent of their seed.”

It is such policies that make it difficult to have a functional Common Market in the region, he argued.

“What we need is political determination to define the term ‘domestic’ to mean East African. Without allowing people to move freely and to trade more liberally within the EAC, the CFTA will be even harder,” Dr Sezibera said.

The EAC economy has had an average annual growth of 6.7 per cent between 2013 and 2017, the highest of any bloc on the continent.

According to Uneca estimates, the region is set to grow at 6.0 per cent in 2018, rising to 6.2 per cent in 2019.

This strong performance is credited to improvements in agricultural production and sustained infrastructure investment.

Prospects for regional growth have also been bolstered by the resolution of the long-standing political conflict between Eritrea and Ethiopia, which promises to provide a substantial boost to growth in the Horn of Africa.