Infrastructure key to AfCFTA’s success
Africa has an infrastructure deficit of over US$100 billion and this must be seen as an opportunity to invest and help boost intra Africa trade, African Continental Free Trade Area secretary general Wamkele Mene told delegates at the Intra-African Trade Fair 2021 currently underway in Durban, South Africa.
He, however, said investors would likely invest in places where there are legal frameworks that can protect investments.
Speaking during a conversation titled “Understanding the Critical Elements of AfCFTA”, Mr Mene also spoke about the challenges faced by economic agencies when transmitting goods across countries as a major drawback to trade.
He gave an example of the route between Abidjan and Lagos, a distance of a little over a thousand kilometres, which takes about 12 to 15 days, with 37 checks along the way.
“This is a drain to regional competitiveness of Economic Community of West African States (ECOWAS) and there are other regions with similar challenges”.
These challenges, Mr Mene said, should be addressed under the AfCFTA, which has annexes on transit, trade facilitation and also an annex on customs procedures.
“And all of these instruments harmonise how goods should transit through borders. So, they set a minimum standard of treatment which was not there.
“And in addition to setting a minimum standard of treatment, they also provide legal recourse if goods are turned away for no substantive or valid reason,” Mr Mene said.
He said Africa has to learn from the practice in East Africa where goods transiting between Mombasa and Kampala, for example, just take two days because of the investment that was made in soft and hard infrastructure as well as the convergence of customs procedures which makes it much more efficient.
He said AfCFTA will focus on trade facilitation for the transit of goods in an efficient way according to the rules ratified by 39 countries.
“Secondly there is also a need to invest in the soft infrastructure that I referred to and the hard infrastructure that I referred to.
“The component that would really be critical for all of this is when we get to zero duty trade on the African continent. That is what ultimately will help to boost intra Africa trade.
“We have regions and trade corridors in our continent that are actually designed to facilitate trade with Europe more than intra-Africa trade.”
Mr Mene said trade corridors must be complemented with a reduction and removal of tariffs.
“It’s not sustainable that in less than 1 000 kilometres there are more than 37 check points, and that your goods take 12 days to get there.
“We have a lot of work to do,” Mr Mene said.
His comments come at a time Zimbabwe has invested approximately 34 percent of its 2021 budgeton infrastructure projects.
Work has been done and is still being done on the major trade corridor, the Beitbridge to Chirundu roads.
In addition, the Beitbridge Border post is also under construction in a deal worth an approximate US$300 million.
The border post recently introduced standard operating procedures (SOPs) that separate transporters complying with pre-clearing requirements from those who aren’t and this has seen a tremendous improvement on the movement of traffic.
ZimTrade chief executive officer Allan Majuru, who is IATF country active ambassador and attending IATF2021, said supportive infrastructure was critical in enhancing intraAfrican trade. “Creating an enabling environment, in the form of supportive infrastructure and institutions is critical in enhancing intra-African trade, which is currently low.
“The inadequacies of such infrastructure has seen African countries trading more with the rest of the world than amongst them.”
Mr Majuru said there is therefore a need for improvement of road networks, simplified customs processes and integrated procedures that makes it easy for companies to move goods from one African country to the other.
Although the infrastructure deficit has been a major challenge affecting trade, the ongoing efforts by President Mnangagwa’s administration to build supportive infrastructure are commendable, Mr Majuru said.
“Developments on roads, border posts and airports linking Zimbabwe to the rest of the continent will go a long way in boosting the country’s trade with the rest of Africa.”-The Herald
