Following the launching of the Africa Continental Free Trade Area (AfCFTA) on January 1, 2021, Mansa Banko Online had an exclusive interview with an economist Mr. Abdou Kolley, who previously served as the Gambia’s Minister of Trade, Employment and Regional Integration, and Finance and Economic Affairs, respectively for several years, under the government of former President Yahya Jammeh.
The interview centered on this significant and giant African trade and integration strategic framework; dissecting some of the opportunities, risks involved and intricacies of the world’s largest trading protocol which has a GDP of over $2.5 trillion, with a population of 1.3 billion people.
As this medium gathered, Kolley studied in France where he obtained an Advanced Diploma in French Language, and Bachelor’s and Master’s degrees in Economics from the Jean Monnet University; a French public research university based in Saint-Étienne and has been consistently ranked as one of the top universities in France
He started work in 1997 as an economist at the Ministry of Finance and Economic Affairs (MoFEA), and later moved to the United Nations Development Programme (UNDP) Office in The Gambia as a National Economist, before his appointment by ex-President Yahya Jammeh as the country’s Minister of Trade, Industry, Regional Integration and Employment; and finally as Minister of Finance and Economic Affairs.
The former State Minister now works as a freelance consultant offering development advisory services, policy and strategy development and financial management trainings.
The interview continues as follows:
Mansa Banko Online: Could you give us a rundown of your understanding of the African Continental Free Trade [Area-AfCFTA] Agreement?
Kolley: The Africa Continental Free Trade [Area] Agreement is believed to be the largest free trade area after the World Trade Organization (WTO), with 54 out of the 55 African countries having signed up to it since its adoption in 2018 at the Kigali [Rwanda] African Union Summit. Through effective liberalization of trade in goods and services (opening up borders, elimination of tariffs and other non-tariff barriers to trade, etc.), the agreement is meant to boost trade among African nations, generate employment and promote investment thereby contributing significantly towards poverty reduction in Africa. Put in simple terms, with this trade agreement, goods produced in the Gambia can be traded in any member country without any restrictions like tariff, quotas, and so on, being imposed on them.
Mansa Banko Oonline: Where does this place Africa on the global trade?
Kolley: Africa’s potential as a major trading block is grossly under-utilized largely because of the fragmented nature of its markets and the fact that African nations trade more with the outside world than with themselves. So, with this agreement, African countries will be able to trade among themselves more easily and, by so doing, maintain wealth within the continent. Also, the resulting cohesion means African countries can form a formidable block that can negotiate better deals in their dealings with outside partners, thus contributing to enhancing the welfare of its citizens.
Mansa Banko Online: Could you share with us the opportunities and risks for the small Gambia, in such a mighty trade protocol?
Kolley: In any trade deal, there are potential benefits and risks, and the realization of either [of the two] depends on how each country braces up itself to the situation.
For the Gambia, the agreement presents great potential in terms of market (for both input sourcing and outputs) such that investing in Gambia is no longer constrained by the current limited market size considerations.
For an investor in the Gambia, the market is no longer the two (2) million population of the country but the over 1.3 billion people of the continent. The major risk for us as a country lies in our ability or absence thereof, to be innovative, to focus on what we have as a comparative advantage, and to effectively integrate and take advantage of regional and global value chains; failure of which means our little industry will be wiped out so quickly.
Mansa Banko Online: The Agreement is set to boost intra-African Trade, employment, and investment and reduce poverty. How [could these be achieved]?
Kolley: In simple terms, this is how it works: each time Gambia buys goods or services from Senegal for example, it contributes to creating wealth in Senegal, and by creating such wealth for that country; it directly contributes to reducing poverty as well. The same applies if Senegal buys goods and services from the Gambia. So, the more African countries trade among themselves, the more wealth is created and retained on the continent, and thus more poverty reduction is realized.
In terms of investment, trade agreements offer the opportunity for specialization and more investments by member countries in order to boost production and stay competitive. Similarly, the more we invest especially in processing/transformation on the continent, the more wealth is created and retained and the more poverty is reduced.
Mansa Banko Online: Some countries are still insisting not to ratify the trade agreement even though they signed it. Why do you think this exists?
Kolley: Every trade deal offers opportunities and presents risks. Sometimes the risks are more perceived than real, and tend to be fuelled by the fear of change. Even when the risks are real, they do tend to be short-lived if proper adjustments are made. So, what is most important is for every country to try and identify the opportunities and risks-perceived or real -associated with the implementation of the agreement and then devise a strategy to seize those opportunities and counter the risks.
Mansa Banko Online: [On] the three protocols like trade in goods, in services, and dispute settlement, could you share your reading on how these three key protocols would operate in Africa; a continent that is riddled with several trade regulations, endless tariffs and other border crossing challenges?
Kolley: For the protocols on trade in goods and in services to operate, [it]means African countries must embark on liberalization of their markets (dismantling of restrictive trade regulations, tariffs and non-tariff barriers including cross border challenges).
In effect, the agreements provide for progressive liberalization over a period of up to ten (10) years or more depending on whether the country is an LDC [Least Developed Country] or a non-LDC. This phased liberalization allows time for countries to put in place measures to counter any potential negative effects liberalization may have on their economies. The dispute settlement protocol, on the other hand, provides a mechanism for redress, whereby operators or member states that are aggrieved in the way the agreements are being implemented could channel such grievances for review, consideration and settlement.
Mansa Banko Online: Could you please highlight some of the key stakeholders and beneficiaries of this trade agreement for the Gambia?
Kolley: Everyone in the Gambia is a stakeholder and a potential beneficiary. Citizens are expected to move more freely within the continent as the agreement is associated with enhanced free movement of persons and goods. Gambian businesses will have a much wider market for sourcing inputs and for distribution of their goods; that is, if they adjust accordingly and are provided with the right supportive environment by government. While government may lose revenue in the short-term resulting from tariff dismantling, its revenue potential could be enhanced in the medium to long term through enhanced business operations resulting from expanded market access, and other diversification strategies.
Mansa Banko Online: Please, [can you] share your thoughts on the possible challenges for the implementation of this deal in Gambia’s case?
Kolley: The Gambia has for many decades now been an advocate of free trade and has been implementing a liberal trading system, remaining fully committed to implementation of all ECOWAS regional integration programs. The country is, however, characterized by a small and relatively less vibrant private sector constrained by several factors.
In the area of international trade, our conspicuous geographic location has over the years been a major obstacle to Gambia’s trade with other countries in the sub-region.
The country has good trading ties with Guinea, Guinea Bissau and Mali, but to access these countries, one has to pass through Senegal. And there have been and continue to be obstacles along these transport corridors, despite [the] existing ECOWAS as well as bilateral agreements meant to facilitate free movement of persons and goods. Just like the ECOWAS protocols, implementation of the African trade agreement would require full adherence by all member states, to the set rules, and elimination of administrative obstacles and non-tariff barriers that hamper the free flow of persons, goods and services.
Mansa Banko Online: Any chances of this deal becoming another white elephant trade project for Africa?
Kolley: An agreement is as good as it is implemented. By and large, it is my belief that the agreement is beneficial to the continent and should be implemented, periodically reviewed and adjusted as necessary to take care of any negative effects. If all member states remain committed (and I underlined commitment) to advancing our collective prosperity, and translate that commitment into action, then there is no way the agreement could become a white elephant–though early signs are not very encouraging. Trading under the agreement was supposed to take-off [on] 1st January 2021 but this has been delayed as some member states claimed they are not ready yet, according to the AFCFTA Secretariat. I still remain optimistic that implementation will eventually and effectively take off.
Mansa Banko Online: Please, feel free to add anything else you feel is relevant on this particular interview.
Kolley: Africa has the potential to become the richest continent and a powerful voice in the international arena if only we can work together and also enhance trading among ourselves.
However, for some reason, this has not been happening as Africa remains largely fragmented and member states tend to go solo [alone] as opposed to working together.
The African Continental Free Trade Agreement, however imperfect it may seem, offers a good and solid foundation for the continent to take charge of its own destiny and become a major player in the international scene, while lifting its people from extreme poverty, destitution and marginalization.
