Key Element for a Partnership
May 6, 2020
A new framework for investment and trade through a Partnership with Africa
May 6, 2020
Designing the Partnership with Africa

The cooperation between AECIT and the High Level Group on Africa-Europe Partnership, a new spin-off of one on Trade Policy, brought together experts both from Africa and Europe to discuss the future partnership of the two continents.

The conclusions highlight

  • that Europe and Africa together can make a difference in the current global geopolitical and economic conditions,
  • that a fresh look at the relative failure of decades of aid policies is needed to move away from existing pathways and to avoid stagnation in Africa,
  • that a radical game change in Europe’s policies with Africa is required to create an innovative and comprehensive relationship that benefits the partners mutually,
  • that Europe needs to move away from a development aid approach and towards the framework conditions for investment and trade. Only these will bring lasting sustainable growth and employment for African people.

As stated before, the future partnership between the EU and Africa should be an equal partnership that is based on shared interests. Patronizing aid thinking in EU institutions and Member States and an unbalanced view about the era of forced and unilateral interdependence of the 19-20th century remain an obstacle to the engagement of stakeholders and decision-makers. At the same time, Africa needs a new governance model for its own economic integration.

It reviewed previous work in the light of the promises by the new EU Commission and felt that they are not indicating a much needed game change.

One should start to entrust an independent group of leading thinkers from Africa and Europe to design a new, honest and inclusive narrative for the future Partnership.

As a sign of a new beginning, the EU Commission should extend its current exchange program to all African countries and rename it the Senghor program, after the leading African philosopher, poet and politician. It should be aimed at a really significant  group of excellent students from African universities and business schools to make a difference.

More coherence in EU policy making towards Africa is needed to overcome fault lines within the Commission and the EEAS and between the EU and all Member States. In order to co-design a coherent long term strategy, existing policies need to be re-evaluated and African owned initiatives need to play a bigger role.

In particular, the AfCFTA, which has the potential to be the equivalent to Europe’s Paris and Rome Treaties and to boost intra-African trade by more than 50%, deserves Europe’s full support. Both partners should evaluate how to fit future and existing policies into the AfCFTA and radically innovate the concept and practice of the EPAs and the ongoing post-Contonou Agreement negotiations.

Therefore, the conclusion of the post-Contonou Agreement should ideally be postponed for one year while continuing existing arrangements. Alternatively, a legally binding provision should be included in the new post-Contonou Agreement, stating the need of future synergies and amendments with the AfCFTA and including a budgetary shift towards future Partnership.

Therefore, it is necessary to focus now on the real substance of the Partnership. Priority should be given to the framework conditions to make the AfCFTA operational. The EPA and post-Cotonou Agreements should be made fully coherent to this goal and amended in the shortest possible time.

In general, the funding approach must shift towards investment and towards building a functional capital market both for the private sector and for public finances in Africa. The most important benefits for both Africa and its partners may come from the non-tariff agenda.

A free trade area between the two continents, may not be a short term prospect, but in the future geopolitical and economic context it may well be in the mutual interest. This thus is the key mission for both continents. Many of the old cooperation mechanisms are unsuited for the future and key framework conditions, such as the following, will require priority attention:

Infrastructure development

Capital market functioning

Efficient and fair taxation systems

Framework conditions for affordable and innovative products and services

Research to innovation value chains

Capacity acceleration and integration of SMEs in Global Value Chains

Development and application of competition rules

Synergies with Europe’s Green Deal, including hydrogen production

Regional integration to prepare for global competition

There should be an effort to synergize national and European policies with this overarching goal. Overall, there should be a radical paradigm shift from aid to investment. Aid should remain reserved for humanitarian crisis situations and for combatting extreme poverty, but it should not be mixed up with creating framework conditions for investment and trade. Only a reliable framework for private investments will lead to the much needed sustainable economic growth and job creation in Africa.

Stefan Schepers

Director of African-European Centre for Investment and Trade