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Synergy between AfCFTA, BRI will work out better economy for Africa and China

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The Belt and Road Initiative (BRI) and its ideals and objectives, has been deployed since it incepted, formally in May 2017, into making the world better by engendering a more robust global economy through roles that target a world with shared benefits.

This paper also expatiates the tenets of the Africa Continental Free Trade Area (AfCFTA) The AfCFTA, a platform for continental economic benefits through trade in the entire Africa aims to elevate the African trade bloc to a place of better economic possibilities, using free trade among state parties.

With a vibrant partnership between Africa and China already in existence especially on the FOCAC, this presentation tries to draw a parallel on how best the objectives of the AfCFTA and the BRI would strengthen each other.

China has already endorsed the AfCFTA and promised cooperation with it for better economy and also integration with the BRI that operates similar objective targeting the larger world economy.

With China as supporter of African economic emancipation, the two bodies working together would spawn myriad benefits and scale heights in forging a better world with better economy where poverty that is crippling Africa would be attacked decisively.

To underscore the importance of the integration of the two, AfCFTA region and China make up 2.7 billion or 34 percent of world population. Therefore, with the BRI, with some 136 countries and intergovernmental organisations, already signed on at the end of 2019 working with the AfCFTA, the entire BRI and AfCFTA integration would be outstandingly positive at a period some major world economies push for decoupling of multilateralism.

BRI

A single inaugural event graced by 29 presidents and heads of governments and heads of six intergovernmental organisations including the World Bank, IMF, AIIB, WTO, EU Commission, AU, IFC set out on a sound footing and loud ovation. The BRI since then has not slowed down, building on the momentum of its take-off.

The underlying objective of the BRI is a better world with pivot on better economy that lays the foundation for the eradication of poverty globally, the shortest distance in the journey to the elimination of conflicts, wars, crises and divisions all over the world.

An extract from the inaugural speech of President Xi Jinping succinctly explains better what the BRI is all about. He had said: “China will actively promote international co-operation through the Belt and Road Initiative. In doing so, we hope to achieve policy, infrastructure, trade, financial, and people-to-people connec66666gtivity and thus build a new platform for international co-operation to create new drivers of shared development.”

AfCFTA

The prime objectives of the AfCFTA include:

  • To create a single continental market for goods and services, with free movement of business, persons and investments
  • Pave the way for accelerating the establishment of a Customs Union.
  • Expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation and instruments across Africa in general.
  • To enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access and better reallocation of resources.

“The AfCFTA will be governed by five operational instruments, i.e. the Rules of Origin; the online negotiating forum; the monitoring and elimination of non-tariff barriers; digital payments system and the African Trade Observatory.

The union became so important to change a prevailing discouraging situation where made-in-Africa commodities within the African market is a pitiable 4% of the trade volume. So only a body as this would create the opportunities to overcome such hitch.

In the Asian and European markets, their indigenous commodities within their markets make up an average of 65% of the total.

AFRICA-CHINA TRADE IN THE PAST

In celebration of the 20 years of FOCAC, Chinese Foreign Minister, Mr. Wang Yi said in an article we published on our online platform – www.africachinapresscentre.org that Chinese investments in Africa grew 100 folds since year 2000 as trade soared to $208.7b, 20 times the size of 2000. China has been Africa’s largest trading partner for 11 years in a row, and has contributed more than 20% to Africa’s growth for a number of years.

Better international trade like the one envisaged between the AfCFTA and the BRI fosters processing of raw materials – which is industrialization with larger available market access. China has demonstrated this unambiguously that it wants to invest outside for some reasons and Africa has been an attractive destination.

BENEFITS OF AfCFTA, BRI COOPERATION

Let me make this vital point that as China braced up for her long diplomatic journey in the 21st Century, the first bastion it forged into being is the FOCAC. I would not know if that was deliberate or a coincidence that while China needed the entire world space to swim in given its enlarged stature, it took to FOCAC before even joining the WTO.

But whatever it was that informed this decision, the FOCAC has survived and flourished so well that a further integration, now between the BRI midwifed by China and the AfCFTA will definitely be another step in the right direction.

On the benefits of integration and multilateralism in trade and economy, I wrote in a well celebrated article in the Nigerian print and new media in August 2020 that: “Benefits of economies joining and aligning with international trade platforms are best certified with China that joined the WTO in December 2001.

“From 2001 to 2010, China’s exports rose nearly six times to roughly $1.57 trillion, while imports rose by nearly the same order of magnitude to $1.39 trillion. Surely, the market access that China received as a result of its accession to the WTO contributed to its trade performance.

Membership in the WTO also provided foreign investors with assurances that China was part of a system of international rules and disciplines.” This was actually taken from the statement of the DG of the WTO in 2010, Pascal Lamy.

SHORTFALLS

The BRI master plan includes mainly the East Africa linkages by sea, air and other connectivity.

Since 44 African countries have already signed up to the BRI, only 10 African countries are left out and that no doubt goes far beyond the East Africa in the original plan. So, the BRI needs to convince the entire Africa of its coverage beyond the eastern flank of the continent.

Thank you as I wish this gathering a fruitful deliberation to strengthen the Africa and China friendship and cooperation.

IKENNA EMEWU

Summary of a paper presented by Emewu at the 9th China Africa Think Tanks Forum in Beijing on November 6, 2020

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