Economic Partnership Agreement not a priority for Africa – AU

The Deputy Chairperson of the African Union (AU) Commission, Erastus Jarnalese Onkundi Mwencha, says the structure of the Economic Partnership Agreement (EPA) between the continent and the European Union is not to Africa’s advantage.

“Our advantage is regional integration. Can EPA help us to integrate our markets? If anything it will stall us. I don’t think EPA is a priority for Africa,” Onkundi Mwencha told Business and Financial Times in an exclusive interview on the sidelines of the 7th ordinary session of African Union Ministers of Trade conference in Accra.

He explained that regional integration will help develop larger markets, foster greater competition and improve the policy stance in many areas of the development agenda.

The goals of cooperation and integration have been highly sought-after by African nations since their independence, and high hopes have been evoked that African countries will enlarge their economic space for production and trading among themselves, quite apart from enabling them to rise to the challenge of an increasingly competitive global economy that includes powerful regional economic blocs.

Yet progress towards increased intra-African trade as a major objective of this integration agenda has been less than impressive.

“There is not enough trade among African countries. The structures of our economies have been intended to produce raw materials, and we export these raw materials.

“What is important now is for Africa to add value to raw materials and use Africa as a base for industrialisation and trade,” he said.

He added: “There is a huge consumption capacity in Africa. Our trading volume is now 1 trillion – which we can use to propel growth in the region.

“But we must improve our competitiveness; look at infrastructure, quality of products; and look at trade facilities, and change our mentality.”

On average over the past decade, only about 10-12 percent of African trade has been with African nations, whilst 40 percent of North American trade is with other North American countries, and 63 percent of trade by countries in Western Europe is with other Western European nations.

Currently, African economies are very heterogeneous in terms of applied and faced protections. Some Africans impose an average tariff of 13.3 percent on their imports coming from other African countries, more than the average protection on the continent of 8.7 percent.

For nearly one-third of African countries, both imposed and faced protections are on average lower than the relatively high averages for the continent.

The rest of the countries either are more protectionist than Africa on average, or have a more difficult access than the African average.  One-quarter of the countries are on average more protectionist and face more trade barriers than Africa as a whole.

Onkundi Mwencha believes Africa has the capacity trade within itself but must start to address what makes trade easy.

He told B&FT that the January 2012 AU summit of Heads of State and Government will focus on the theme “Boosting Intra-Africa Trade”.

He said the choice of the theme is both appropriate and timely, given challenges facing trade, and there is need to come up with strategies to improve the situation.

On the issue of the late of Libyan President, Muammer Gaddafi, he said the AU was on the spot from day-one. “The question is whether we did enough. We did what we could under the circumstances.

“Gaddafi promised us to step-down; but you know, Gaddafi says one thing and does another.  The AU has never believed in force to settle disputes,” he said.

Gaddafi died of wounds suffered as fighters battled to complete an eight-month uprising against his rule.

His killing, which came swiftly after his capture near Sirte, is the most dramatic single development in the Arab spring revolts that have unseated rulers in Egypt and Tunisia, and threatened the grip on power of the leaders of Syria and Yemen.

Source: B&FT