Regional Economic Communities

With over 100 countries involved, the revision of the ACP-EU Partnership Agreement, signed in Cotonou on 23 June 2000 is an extremely important endeavor that presents immense opportunities to all the parties and that requires careful negotiations. The Agreement will expire in 2020 and the parties are currently negotiating a new framework that is expected to reflect today’s socio-economic opportunities, challenges and concerns. This contribution looks at some of the strategic elements to consider when updating or amending investment-related provisions of the ACP-EU Partnership Agreement.

The creation of a single continental unit is meant to allow the formation of larger economies of scale and enhance the region’s specialization in agricultural and industrial production. However, the reduction or even elimination of tariffs will not be enough to reach the AU’s objective of doubling the existing level of intra-African trade, as significant and continent-specific challenges lie ahead.

The first seeming obstacle to the emergence of a single African market is the contradictions between the stated aims of AfCFTA and some of the principles set out in the AfCFTA Agreement. As noted earlier, AfCFTA’s objectives include creating “a single market” and laying “the foundations for the establishment of a Continental Customs Union”. Yet, one of the principles under Article 5 is “variable geometry”, that is, differentiated integration. Of course, variable geometry was designed to recognise the heterogeneity and diversity in Africa’s economies. However, a single market is not consistent with an a la carte approach, where members integrate at different speeds.

This low level of priority accorded to the social impact of the AfCTA contradicts the core values and aspirations of the African Union (AU). Most notably Article 3 (g) and 4 (c), (I), (m), and (n) of the AU Constitutive Act which all envisage an African Union that is democratic, inclusive, open to the participation of stakeholders, and sensitive to social concerns in the pursuit of economic development. However, going by what transpired prior to Kigali, it appears that priority was not accorded to these concerns mentioned above. More importantly, the recent hiccups experienced at the Kigali Summit are evidence that dialoguing with a broad range of stakeholders about the impact of trade on social structures is vital to the attainment of legitimate and effective economic agreements in Africa.

The signing of the consolidated text of the African Continental Free Trade Agreement (AfCFTA) in March 2018 by 47 African Union member States was a significant milestone. It was the first time since the Abuja Treaty of 1994 that a continental trade agreement had been negotiated. This symposium critically appraises the agenda of the AfCFTA. It kicks off with a post that boldly makes the case why this agreement promises to redress the comparatively low levels of intra-regional trade as well as the dearth of high value exports from Africa.

Welcome to Afronomicslaw.org, a blog on the international economic law landscape as it relates to Africa. A major goal of this blog is to complement current analysis of international economic law issues as they relate to Africa in the blogosphere. We believe that this blog is particularly timely because there are significant international economic law developments taking place in Africa that invite more contemporaneous reflection and discussion.

The AU’s focus should be to design the AfCFTA investment protocol as an instrument that will treat all investors equally, and that will also foster harmonisation at continental level from the top down. My argument is still valid although my solution will not resolve questions such as divergent policies and views with regard to whether investor state disputes should be referred to arbitration or litigation. Central to this issue is that African states have different levels of the rule of law. This means that under circumstances where the rule of law is poor, obliging investors to refer disputes to the courts of a host state riks denial of justice.

In order for the benefits of the AfCFTA to trickle down, African countries need to adequately consider ICBT when designing and implementing trade policies. Trade policies will be incompletely conceived and may not sustain the economic development goals that integration is supposed to deliver if African countries do not adopt a holistic approach that recognizes the importance of ICBT.