African leaders discuss Cairo to Cape Town trade zone

African leaders have long dreamt of creating an economic community spanning the vast continent. It would ideally be like the European Union, with open borders and the free movement of goods without customs barriers. "A large common market from Cairo to Cape Town," is how Tanzanian President Jakaya Kikwete recently described his vision for the future of a Continental Free Trade Zone (CFTA), even though today's reality looks very different.
Nevertheless, the intention is to bring this dream within grasp during the annual African Union (AU) summit, whose main session starts in Addis Ababa on Sunday (January 29). A roadmap has set 2017 as the target date, but there are considerable obstacles.
Renewed talks have been launched, combining at least three of the eight overlapping African economic communities - EAC, SADC and Comesa - in the east and south of the continent. But despite endless conferences, alliances and treaties, trade within Africa makes up just 12 percent of the continent's total, according to figures for 2010 from the African Development Bank.
Africa has little commercial significance even for South Africa, the only state on the continent characterised as a "Newly Industrialised Country". More than 85 percent of South African trade goes outside Africa. An economic community could be a decisive step in the battle against poverty and towards sustained development, just as wider economic groupings are playing a dominant role in the economies of South East Asia, Europe and North America.
"The AU summit will, on the one hand, discuss a plan of action with a view to boosting the internal African trade, and on the other, (be) the starting gun for the creation of the continental free trade zone," said Stephen Karingi, director of the Department for Regional Integration, Infrastructure and Trade at the United Nations Economic Commission for Africa (UNECA).
A central aim is to export more finished goods, not just natural resources, to the rest of the world. Africa's oft-cited economic boom in recent years has been nourished largely by a single source - raw materials - consisting by more than two-thirds of the export of resources such as oil, uranium, titanium, copper and gold.
Demand within Africa has risen moderately, but serious problems stand in the way of a real economic boom that would improve the lot of the majority of Africans. Firstly, there are too few locally manufactured products. Asian producers fill the shelves of African stores with laptops, mobile phones, clothing, pots, tools, television sets and even ready-made meals, quite apart from machine tools and other heavy industry products.
Industrial production declined as a proportion of output from 15 to 10 percent over the past 20 years, according to UNECA. By comparison, in Asia it rose over the same period from 23.5 to 30 percent. Another barrier to trade is the poor state of African transport infrastructure. Trading structures and warehouses, trucks, railways and roads are all lacking - everything, in fact, needed to promote trade.
"Where there is a road network, traders often lose too much time at border stations," Karingi says. All of this leads to a situation in which even countries with plenty of fertile soil, like Nigeria, Mozambique and Zimbabwe, continue to import food - or depend on international food aid.
Nevertheless, projects are underway to improve infrastructure, including the planned Trans-West African Coastal Highway from Mauritania to Nigeria, and the Northern Corridor intended to facilitate sea access for landlocked countries like Burundi, Rwanda and Uganda, through the Kenyan port of Mombasa. Africa has everything needed to emulate the Asian tigers - cheap labour, plentiful natural resources, good soil, potential markets, and a plan for the future.
But the political structures are lacking, along with investment of the proceeds from natural resources into infrastructure and education. "We can achieve all of this, if the political will is there," said Kikwete, summarising Africa's prospects.