AfCFTA, a catalyst to aggregate disarticulated markets

The African colonies or territories were grouped into different categories. There were colonies that were sources of minerals, colonies for plantation crops, colonies for European settlement, and colonies for peasant production. The colonies under the first three categories include Congo, South Africa, Zimbabwe, etc. Some of the colonies under the last category, which is peasant production, include Nigeria and Ghana.

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August 10, 2021

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The original African marketing centres were distorted by colonialism. Colonialists created new marketing centres and routes where their required raw materials could be easily bought and evacuated back to Europe, notes Professor Chinweizu.

The African colonies or territories were grouped into different categories. There were colonies that were sources of minerals, colonies for plantation crops, colonies for European settlement, and colonies for peasant production. The colonies under the first three categories include Congo, South Africa, Zimbabwe, etc. Some of the colonies under the last category, which is peasant production, include Nigeria and Ghana.

Chinweizu notes that colonialism integrated African markets into the world trade, without adequate development of its internal dynamics and forces of production. This premature integration did not allow for accelerator and multiplier effects necessary for economy advancement and development in the continent. The raw materials produced by Africans were not used by industries located in Africa, but abroad. Therefore, there was no organic linkage between the agricultural sector and the industrial sector.

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It is in this light that the Africa Continental Free Trade Areas (AfCFTA) Agreement should earn the admiration and support of Africans, at home and in the Diaspora

Chinweizu, a renowned professor, went a further step to illustrate the concept of “accelerator and multiplier effects” through an example, explaining that, fundamentally, goods and services are sold for profit and income generation.

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If for example, Japan, an industrialized nation sells Sanyo television to an African State which could be Nigeria, the money paid for the product serves as profit and income for the television company located in Japan. If the company uses the money paid to it to buy something in Japan, it helps to accelerate the economy of Japan. This accelerator effect was totally absent in African territories during the period of colonialism. The absence of the accelerator factor/effect created the propensity for Africans to keep importing continuously from outside without depending on their own goods.

Further to this, the multiplier effect concerns the reinvestment of profit appropriated from an economy. For example, under a normal economy and circumstance, when a profit is made from an economy, it is re-invested to stimulate and generate new profit. The profit can be reinvested into new enterprises within the economy. The re-investment of accumulated profit into an economy helps the economy to move very fast and to generate new profits.

The ability of re-invested profit to bring out new profit is referred to as multiplier effect. This was absent in the African economy during colonialism. This is because the colonialists did not re-invest profits appropriated from the African economy, rather they transferred the profits abroad for the development of their home economy. This greatly accounts for the present underdevelopment of most African economies.

The distortion was to extend to the transport system in Africa. Transport routes were built by the colonialists to enable them to evacuate easily the raw materials from their sources or base to a point from where they could be effectively exported abroad. The transport network developed was essentially rails and seaports. The distorted, disjointed, and disarticulated transport system developed by the colonialists did not allow for effective agricultural and economic integration within the different parts of the African enclaves and territories.

AfCFTA offers a single continental market size of 1.3 billion people, including a growing middle class and a combined gross domestic product {GDP} of US$3.4 trillion. In terms of participating countries, the AfCFTA is projected to become the world’s largest free trade area since the formation of the World Trade Organization {WTO}. It brings the promise to restore and integrate the markets and economies of Africa, and equip them with the needed internal dynamics to compete globally.