Dr Alex Ansong, Senior Lecturer and Head of Public Law Department at Ghana Institute of Management and Public Administration (GIMPA) Faculty of Law, says resorting to economic nationalism by erecting barriers to both trade and investment, will not only be detrimental to all sates but would hurt developing countries, especially in Africa.

According to him, what states need to do is to make use of multilateralism to boost trade and investment post-Covid-19  

As at now, the imposition of restriction had affected trade and investment in the current Covid19 pandemic, but continuous maintenance of such measures post-Covid-19 will have a detrimental effect on Africa’s chance of increasing participation in international trade and investment.

Dr Ansong holding a virtual meeting via Zoom under the heading: “International Trade and Investment Relations after the Pandemic: Africa Rising?” Wednesday, May 27, 2020, noted that the African Continental Free Trade Area (AfCFTA) holds a lot of potential for member states but Covid-19 outbreak has greatly affected any prospects to be made in the short term.

“The AfCFTA is thus a positive development for Africa as the continent seeks to advance its own interests through intra-African trade. However, the positive prospects that the AfCFTA offered to the continent in both trade and investment have, at least in the short term, become quite limited due to the outbreak of Covid-19,” he posited.

Meanwhile, Africa’s share of global trade has declined over time in spite of efforts aimed at increased participation in international trade.

This he said with the proliferation of regional economic communities on the continent, there would have been the expectation that, at least, intra-regional and intra-African trade would steadily increase and contribute significantly to Africa’s contribution to international trade.

Much of the problem was blamed on Africa’s high proportion of exports to be largely unrefined natural minerals, a predominant agrarian economy, and a lack of diversified exports intra-African trade has continued to be quite sluggish.

Yet the Agreement establishing the AfCFTA envisions further liberalization and rules in the areas of investment, intellectual property rights and competition policy.

This means if all the 54 signatory states ratify the AfCFTA, it will become the biggest free trade agreement outside the World Trade Organisation (WTO) in terms of number of country participants.  

“With a population of 1.3 billion people, an Africa-wide single market under the AfCFTA offers a huge incentive for domestic industries to scale production to reap the benefits of economies of scale. A market size of 1.3 billion people in the AfCFTA can also become a magnet for the needed foreign direct investment in Africa,” Dr Ansong stated.

He added that with the Doha Round of trade negotiations in the WTO effectively dead, members of the WTO are increasingly seeking opportunities for their trade interests outside the global trade regime, which Africa must seek to advance its own interests through intra-African trade.

By Bernice Bessey