The establishment in Africa of the largest planetary free trade area since the World Trade Organization (WTO) has gone almost unnoticed. On 3/21/18, 44 African countries initiated the ‘
ZLEC
‘
(
Zone de Libre-Echange Continentale
).
ZLEC, Zone de Libre-Echange Continentale
The ZLEC agreement was signed in Kigali, Rwanda, and will result in the creation of a single market affecting about 1.2 billion people, with a total GDP of more than $2.5 trillion. Ratifications by at least half of the signatory countries are expected by the end of this year. 11 out of 55 countries on the African continent, including Nigeria, have not joined.
The goal is to intensify intra-African trade, which currently accounts for only 16 percent of the total. To realize the potential for growth, just consider that intra-Asian trade now accounts for 51 percent of total trade, intra-European trade for 70 percent.
Therefore, the ZLEC first and foremost aspires to promote inter-regional trade by removing barriers (tariff and non-tariff), with a prospect of a 60 percent increase by 2022. But also – in the medium- to long-term perspective, to support regional development through diversification and industrialization. As well as to strengthen negotiating power with partners on other continents through the development of unified diplomacy.
Pan-Africanism had been advocated from many quarters since the years after independence, but the interests of colonial powers actually prevented its development. It was not until 1994, with the Abuja Treaty, that the idea of putting in place an African Economic Community(Communauté Économique Africaine, CEA) by 2027 had taken shape. Which had begun to develop through the creation of Regional Economic Communities(Communautés Economiques Régionales, CERs).
At the Addis Ababa summit in 2012, the roadmap in which the ZLEC fits was adopted. Given the heterogeneous levels of progress of the 14 Regional Economic Communities activated so far, a free trade area was planned to be opened by 2017, involving 26 countries. The reality has since exceeded expectations, with as many as 44 countries joining.
ZLEC and the agribusiness sector, scenarios of possible interest to Italy
The agribusiness sector, according to World Bank studies, will be the first to enjoy the benefits of the ZLEC agreement. Already, the African food sector makes about $300 billion a year, which, according to the World Bank, could triple before long.
Italian fruit and vegetableexports have good growth prospects. Not only in North Africa, where apples from the Peninsula are already widespread, but also in the central area. Made-in-Italy kiwis, citrus fruits and table grapes, as well as apples, could then find new outlet areas.
‘Africa is the continent of opportunity and fruit and vegetables is one of the few sectors that, with relatively low investment, can quickly yield good results in terms of food needs and employment‘. (Renzo Piraccini – president of Cesena Fiera-at ItaliaFruit).
Investments in the agribusiness sector can also cover food processing and packaging machinery, where Italy is a leader in Europe.
‘
I see great opportunities
for those who produce technology, machinery that is not too large, irrigation systems useful for optimizing water management. In Africa, basically, there are three types of companies: traditional ones, large internationally oriented ones that use cheap labor to produce for the world market
And then the mid-range ones, the real bet’.
(
Renzo Piraccini)
Dario Dongo and Pier Luigi Copparoni
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
