confidentially speaking
The Africa Confidential Blog
Two views of free trade
Blue Lines
South African President Cyril Ramaphosa's call on Nigeria to speed up consultations on joining the African Continental Free Trade Area (ACFTA) reminded officials of the complexity of economic integration, at a time when the United States has launched a trade war with China, the rest of Asia, Europe, and its North American neighbours.
Although South Africa was not among the first cohort of ACFTA signatories when it was launched in Kigali in May, it has now signed up following discussions with local trade unions and corporations. Ramaphosa's officials argued that the treaty would open markets for South Africa's manufactured and processed goods, earning the country far more than it stood to lose from allowing in unprocessed farm exports from its neighbours.
Another set of interests was at play when Rampahosa, at the Afreximbank annual meeting in Abuja on 11 July, urged President Muhammadu Buhari to join the free trade area. Although Nigeria's economy is the biggest in Africa, and its 190 million people the continent's biggest market, economic cooperation with South Africa has been weak, hobbled by political and commercial disputes.
Many of Buhari's ministers agree, but Buhari is instinctively an economic nationalist, arguing that Nigeria's huge internal market makes possible a radical industrialisation policy including protection of local companies. He also fears the electoral consequences of an influx of cheap imports challenging local producers.