Rwanda, a country that thankfully avoided “humanitarian” military intervention by Western powers during a nasty killing spree in the 90s, is leading the charge on free trade in Africa. Of the 54 countries on the African continent, 44 have signed the agreement, but the traditional economic giants of the continent – Nigeria and South Africa – have not. Surprisingly, Botswana, an example often cited by economists as an African success story, has not signed it either.
CNBC reports on why Nigeria has so far refused to join the agreement, citing a consultant who specializes in global trade:
There is a general sentiment among (labor unions and industry bodies) that Nigeria’s export capacity in non-oil sectors isn’t sufficiently robust yet to expose itself to external competition.
Unions and “buy local” capitalists: The scourge of prosperity and progress worldwide, but also not much of a surprise.
What will be interesting to see is where this bold experiment leads. How can 44 countries with poor institutions come together to form a free trade pact? I am hoping this will lead to more states in Africa. My logic goes something like this: stronger economic ties will hasten the demise of current African states’ superficial institutions, while allowing informal institutions to flourish. Because these informal institutions are better at solving coordination problems, they’ll eventually be recognized as states. Here’s how I put it back in 2012:
A better way of looking at it, and one that I have pointed out before, is to look at Europe realize that it shares roughly the same amount of polities as does Africa (50-ish) despite being four times smaller. I bring up the comparison with Europe because in the Old World things like ethnicity still have a strong hold on how individuals identify themselves with their various social spheres. Rather than the 50-ish number of polities in Africa that we have today, a better way of solving Africa’s problems would be to let the polities currently in place dissolve into 400 polities. Or 500. Then, I think, Africans would know peace and prosperity.
I’d add, today, that this would only be possible if the links built by this free trade pact endure. Economic integration is vital to the dissolution of Africa’s despotic states. (h/t Barry)