Key factors in the success of AfCFTA

Trade under the AfCFTA earnestly began on January 1, 2021 although negotiations under different protocols are still in progress.

The onset of trade is highly laudable as issues on certificates of origin, technology, free movement of people across borders are still being deliberated. Technically, these outstanding issues form the core of trade facilitation on goods and services.

The AfCFTA is hailed as a deep agreement because the vision transcends regional integration. The AfCFTA Secretary General Wamkele Nene in the Foresight Africa Report has highlighted the AfCFTA Vision that seeks to create a platform of knowledge in Africa, promote innovation, and creation of a comprehensive technology strategy that will propel rapid interconnection between businesses across Africa regardless of size. The AfCFTA looks forward to an Africa that will be one of the global leaders in technology.

Some trade experts have criticised the AfCFTA as overly ambitious more so as it has operationalised when there are still outstanding critical issues like the rules of origin. Rules of Origin remains an area that needs to be carefully handled as gatekeepers of the fiscus.

The inherent risk of transshipments due to loose ROOs of origin can impact negatively on the AfCFTA goals. Tight rules of origin will complement efforts within value chains that will be the source of the much needed jobs in Africa.

It is the process of acquiring the AfCFTA certificate of origin that may either promote trade or impede trade. It is important for state parties to be careful on how these processes do not become non-tariff barriers that make it very costly to conduct trade.

Elimination of Non-tariff barriers should be the pre-occupation of state parties. Non-Tariff Measures can easily translate into a Non-Tariff Barriers. Extensive research covering NTM reveal that lines blur between an NTM and an NTB.

Generally governments use NTMs to ensure the imported goods meet domestic regulations. However, studies reveal that in most cases these NTMs are a disguise to uphold protectionism in situations where imports from exporting countries stop, the NTM favours locally produced goods and when compliance to the NTM is costly and burdensome. In such instances the NTM becomes a non-tariff barrier to trade.

The AfCFTA has portal to report non-tariff barriers. The observation is that some traders may not be aware of the existence of such barriers or even the portal itself. It will take a lot of mass education of stakeholders so that they can be able to identify these barriers disguised as trade regulatory frameworks. Lack of well-established broad market information has been the demise of most trade agreements. The establishment of the of the AU Trade Observatory remains important as it offers unlimited access to market information. The access is subscription free — it is at absolutely no cost to any trader within Africa. It will heighten transparency and trust among traders.

What will negate the efforts of the trade observatory is lack of internet connectivity among traders found in the vulnerable groups. The high cost of data can be mitigated through investment in Information Communication and Technology. This calls for strategic partnerships in the form of private-public-partnerships.

Digitisation of processes in the wake of Covid — 19 will remain critical within the AFCFTA. The negotiations are still ongoing as the benefits of riding on technology are immense. The success of technology tools such as block chain will be a double bonus as the whole supply chain in the trade corridors will benefit. Digitisation will largely address rent seeking opportunities, promote efficient collection of revenues, significantly reduce the number of documents in a given consignment, and provide the audit trail of consignments.

The MSMEs as drivers of most economies in Africa should be empowered to know about trade barriers. MSMEs must not to be restricted to the use of the Continental Simplified Trade Regime; they should be conversant with prevailing Rules of Origin. Access to market information and technology should not be a preserve for big companies; trade policy should be in sync with MSMEs aspirations. Women are overly represented within the MSMEs sector. It is this sector that will drive the success of the AfCFTA.

Sitshengisiwe Ndlovu president of OWITZIMBABWE: MBA/UNCTAD: Trade and Gender Linkages/ IAC Dip/Cert: Trade in Services and SDGs: Robert Schuman Center of Advanced Studies/IDEPCert: Making the African Continental Free Trade Agreement Work. She writes in her personal capacity. For more on trade matters visit her Blog on website: www.owitzimbabwe.org