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22nd Sep 2018

EU wants continental free-trade deal with Africa

The European Commission wants a continent-to-continent free trade deal with Africa, shifting relations away from development towards trade.

The proposal is a long-term goal for what it describes as a "new alliance" with the continent amid promises to create up to 10 million Africa-based jobs in the next five years.

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Speaking to reporters in Brussels on Friday (14 September), the EU's foreign policy chief Federica Mogherini said the latest plan is different from all the past announcements on Africa.

"We have turned the page somehow, shifting from a 'donor-recipient' kind of relationship, a traditional one based on development aid and humanitarian aid, to a partnership based first and foremost on our political partnership," she said.

The announcement of the new alliance comes as the EU pushes to get reluctant north African states to accept disembarking migrants rescued in the Mediterranean.

The EU is increasing pressure, using "all incentives and leverages", to get governments to take back their rejected nationals.

But it also comes against a background of the turmoil in Libya spiralling out of control.

Mogherini, who was speaking alongside development commissioner Neven Mimica and vice-president Jyrki Katainen, insisted the latest plan is a partnership of equals with African counterparts.

Echoing statements made earlier this week by commission president Jean-Claude Juncker in his State of the Union address, Mogherini described the relationship as one increasingly built on private enterprise.

"We are taking a new step in this direction, launching an Africa Union alliance for sustainable investments and jobs. This will be a major priority for our work in the years ahead," she said.

Similar statements were made last November at the EU Africa summit in the Ivory Coast.

The November summit promised to secure jobs for the youth and ended up with a joint statement to shuffle trapped migrants in Libya to safety somewhere else.

As Africa's population is set to double by 2050, the EU is hoping to turn the demographics to its advantage. Some 60 percent of the population are under 25.

Mogherini said that generation represents an opportunity for economic growth and prosperity and will help weed out corruption and improve human rights and rule of law.

Part of that effort requires better education and training, she said, noting that the EU would help finance vocational training for 750,000 people over the next two years. A further 100,000 will take part in Erasmus by 2027.

But the biggest plan in the new alliance scheme builds on EU's external investment plan.

Launched in 2016, it seeks to turn €4bn from the EU budget into €44bn of private investments in Africa over the next few years.

The commission says it is on track to achieving the target and now wants to extend and expand it in the hopes of creating more jobs and business opportunities.

"We want to continue using this model for the long-term EU budget for 2021 to 2027 and create an external investment platform that will multiply available funds," said Katainen.

The funds will be sourced from the EU budget, the European Investment Bank, the European Bank for Reconstruction and Development, member state development banks and the private sector.

"The focus is now much more on private investment in Africa and we are ready to provide significant amounts of guarantees," he said.

Areas like agriculture, renewable energy and transport are priority sectors amid plans to provide electricity for some 30 million people and road access to another 24 milion.

The EU is Africa's biggest investor. The total foreign direct investment in Africa in 2016 was just under €300bn. Most of it went to Egypt, Kenya, Morocco and South Africa.

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