Comoros chairing African Union a chance to address trade issues

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A belated congratulations to Azali Assoumani of the Union of Comoros on assuming the chair of the African Union for 2023. 

The chair is held on a rotational basis for one year by a head of state or government. The ceremonial chair is anchored by vice-chairpersons from different regions and a rapporteur who constitute a bureau of the assembly of heads of states. This year, Botswana’s Mokgweetsi Masisi and Burundi’s Evariste Ndayishimiye are serving as second and third vice-chairs of the new bureau. 

The third vice-chair, Burundi, is relatively very small in terms of GDP resting at a mere $2.78 billion in 2021 and a relatively small population of 12.5 million people. Botswana on the other hand, has a relatively smaller population of 2.588 million people and reported a GDP of $17.6 billion in the same year.

The first vice-chair position from the Northern region is yet to be announced. Perhaps granting Western Sahara this would cement the African Union’s position on the political status of the Sahrawi Arab Democratic Republic (aka Western Sahara) as a sovereign nation. I can only assume that such would require the will to reinforce crucial decisions made by the AU in relation to the matter. 

Comoros and Western Sahara have relatively similar dilemmas of partial occupation of their territories. For instance, one of the Islands of the Union of Comoros remains colonised by France. And the unconstitutional change of government that plagued Comoros were linked to French mercenaries. 

Comoros consists of four separate islands — Mayotte, which is under French administration, Ngazidja (Grande Comore), Mwali (Moheli) and Nzwani (Anjouran). The last three Islands constitute a sovereign country. Apart from being the first island to assume the leadership of the AU, it is the smallest country to chair the organisation. The country is made up of a population of 821 625 people and had a GDP of $1.296 billion in 2021. According to the World Bank, a quarter of the population lives below the poverty line, and the archipelago is vulnerable to economic shocks, climate change and natural disasters. 

Comoros will reside over the AU chair under the theme of The Year of the AfCFTA: Acceleration of the African Continental Free Trade Area Implementation. This is crucial because intra-Africa trade remains dismally low with “14.4% of total African exports” The regional economic communities meant to facilitate economic integration among African economies are still not reporting satisfactory levels of economic integration. For instance, a total intra-trade in the East African Community in 2021 was at a disappointing 4.76%, the Economic Community of Central African states was 5.9%, Economic Community of West African States was 10.18%, Arab Maghreb Union was 5.44% and relatively highest trade activities take place among the Southern African Development Community with 32.12% of imports but the stats dwindle when it comes to  Common Market for Eastern and Southern Africa. Intra-Africa trade continues to be stunted by infrastructure limitations for connecting the continent.

Comoros’ occupation of the chair should also be our moment of deep reflection and strategizing on how to resolve Africa’s intra-trade deficit and Africa’s export imbalances shaped by various issues. For instance, Comoros’ total value of exports in 2020 was $20 million whereas its total value of imports was a staggering $268 million, highlighting concerning imbalance. 

Moreover, Comoros’ top five import partners are France (26.6%), India (22.84%), Germany (12.43%), Netherlands (8.46%) and Madagascar (7.96%). And the top five exporters are the United Arab Emirates (18.95%), France (15.74%), Pakistan (13.23%), China (6.88%) and Turkey (5.33%). 

These statistics reflect a common crisis on the continent linked to trade agreements that are not geared towards enhancing the intra-trade and economic development interests of the continent. Too many African countries are embroiled in trade partnerships that are not compatible to the special needs of African economies, for instance infant industries forced to compete with globalised enterprises. Negotiations among unequal partners is also a point of concern. It is not difficult to imagine the nature of the 60+ years of trade partnership between the European Union and a tiny country like Comoros. 

In 2022, Comoros and the EU signed a bilateral deal that provides lower tariffs and liberalisation upon accession to the World Trade Organisation. Although the EU offers Comoros complete duty free and quota-free access to the European Market, there remains extreme trade imbalances and under the new bilateral agreement, Comoros agreed to remove trade barriers for the EU by 2024. Moreover, this renewed partnership begs the question of such agreements’ implication on the AfCFTA and Africa’s state of infrastructure to enable effective facilitation of trade. 

The United Nations Conference on Trade and Development (Unctad) estimates that the AfCFTA could boost intra-African trade by 33% and cut the continent’s trade deficit by 51%. One of the challenges is that Africa’s economic growth rate is expected to weaken by 0.3% from 4.1% in 2022 partly because of falling exports and decrease in investment. The effects of the Covid pandemic continue to present an economic quagmire for Africa coupled with decreased demand, global inflation, increasing borrowing costs and effects of climate change.

According to Unctad, the continent has an untapped export potential of $21.9 billion, which is equivalent to 43% of intra-African exports and with partial tariff liberalisation under the AfCFTA, an additional $9.2 billion of export potential can be unleashed. The AfCFTA secretariat has developed tools aimed at facilitating the implementation of the AfCFTA such as a business matchmaking initiative, a pan-African instant payment system under diverse national currencies and an adjustment fund to aid participation in the new African trade environment. 

But many African countries still have several tariffs, for instance Niger, Zimbabwe, Togo, Malawi, Burkina Faso, Sierra Leone, Nigeria, and Gambia among others have 10 tariffs imposed. In total, sub-Saharan Africa has 294 tariffs in place, which has implications for intra-Africa trade. A country like Comoros, which has duty-free access to the European Market, may not easily opt for pan-African trade partnership when there’s taxation imposed on its goods. Moreover, Comoros, as a smaller country both in GDP and industries, can help us illuminate the concerns pertaining to alternatives for smaller African economies that receive significant revenue from tariffs. 

The year of the AfCFTA provides an intriguing opportunity to see what will happen given the renewed partnership agreements with other regional blocs such as the EU. Perhaps with the new agreements, opportunities of rupture from economic partnerships that impair the realisation of Africa’s economic integration and economic independence may be witnessed especially given the era of special preferential treatment for Africa withers further with the death of the Doha development agenda and the Cotonou agreement expiring in June this year. Does the new signed agreement factor the changing regional environment under AfCFTA? To what extent does the new Economic Partnership Agreement affect the aspirations for Africa’s economic integration?

Dikeledi Mokoena holds a PhD in Political Science. She is a lecturer, researcher, facilitator and a public speaker. 

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Mail & Guardian.