EU prosperity points to imminent benefits of AfCFTA

The prosperity of the European Union (EU) is a pointer to the benefits of African Continental Free Trade Area (AfCFTA) .

A once disaggregated Europe came together in Maastricht, Netherlands, on November 1, 1993, to form a formidable free trade union made up of 28 countries with a GDP of $18.4 trillion, making it the second largest economy in the world after the United States.

A study published in July of 2014 by the Bertelsmann Stiftung, a German foundation, showed that German real GDP jacked up at an average of €37 billion per year since 1993, translating into a yearly income rise of €450 per person. Danish citizens’ yearly income rose by €500 over that same period.

One study showed that over ten years (1993-2003), the single market swelled the EU’s GDP by €877 billion (£588 billion). This represented €5,700 [£3,819] of extra income per household.

Free trade and removal of non-tariff barriers have cut costs and prices for European consumers, which is why they are looking for new markets everywhere. Many firms have achieved economies of scale. More than 52 percent of UK exports are linked to the EU. Trade within the EU has increased 30 per cent since 1993, andinward investment from outside the EU rose from €23 billion (£15.4 billion] in 1992 to €159 billion [ £106.5 billion) in 2005.

Despite Brexit moves by the UK, studies show that up to 10 percent of all employment opportunities in that country are directly linked to the EU.

Checks show that EU member states own the estimated second largest net wealth in the world after the United States. They own 25 percent ($72 trillion) of world’s wealth as of 2016 against United States’ 33 percent.

]Twenty-seven out of 28 EU countries have a very high Human Development Index (HDI), which is rated by performances in education, health and income, according to the United Nations Development Programme (UNDP).

The euro is today the second largest reserve currency as well as the second most traded currency in the world after the United States dollar.

On the flipside, the recent poor economic situation in Greece and other EU countries hit big countries like Germany hard and almost dragged them into debts. There are issues like loss of sovereignty of member countries as well as sharp practices but experts say there are more upsides of a strong union than downsides.

“Trade leads to increased prosperity for all, but there is a short-term interest always to protect the gains that come. And this is how we need to understand the plight of manufacturers in Nigeria because many of the things they are dealing with are compounded by factors somewhat beyond their control,”Pat Utomi, political economist and faculty at Pan Atlantic University, said at the NBA-SBL.

“But the question is, what track would we be travelling as a people if we were to give increased prosperity to this incredible population that is growing out of which we can reap a huge demographic dividend or from which we can create a time bomb that can threaten the whole region in a way that Robert D. Kaplan has predicted in his book, ‘The Coming Anarchy’?

“There will be winners, there will be losers. The challenge is to make sure that we encourage those who see themselves as immediate losers to rethink and have a win-win abundance kind of mentality,” Utomi said.

ODINAKA ANUDU