AfCFTA: Internal Trade in Africa Rises 20%, Below Target
The Economic Commission for Africa, ECA says the African Continental Free Trade Area, AfCFTA increased intra-African trade by 20 per cent in 2022, below the commission’s prediction of 52 per cent by 2022.
Speaking on the sidelines of the Ninth Session of the Africa Regional Forum on Sustainable Development in Niamey, Niger, ECA Acting Executive Secretary, Antonio Pedro said the level of trade had increased.
Pedro was then asked if the commission had achieved the objective of 52 per cent intra-African trade.
“Certainly not yet. But the levels of intra-African trade have gone up from 13 per cent or so, before the African Continental Free Trade Area agreement was adopted, to now around 20 per cent but that is not good enough because other regions are trading amongst themselves.
“I mean, above 70 per cent or so Europe, Asia. So, that certainly is our target,” he said. The acting executive secretary said the rise in intra-African trade, was already encouraging certain countries to trade amongst themselves.
“Under the AfCFTA Trade Division, Kenya, a couple of other countries Ethiopia and so on and so forth. So now it’s really about scale, it is about making these movements that cover the entire continent.
“One is to look at the product complementarity between our countries, so we could have African countries trading inputs with another country where, perhaps, you have a much larger processing capacity and one example that I like to cite is between, for example, Gabon and Cameroon.
“Cameroon has processing facilities for palm oil products that require additional inputs coming from the sub-region, and in this case, one could look at certain processed palm oil products coming from Gabon being processed in Cameroon to produce from soaps to oils to all sorts of other things,” he explained.
Pedro said these were some of the efforts which needed to happen.
He said the commission was making a trade decision supporting modelling, which was an exercise to identify the best export destinations for African countries. However, he said the distance within African countries was much farther away than the distance between Africa and other continents.
He says, “In the case of Cameroon, we have done one study; Nigeria certainly is the closest trade destination, however, what is very interesting is that a country that is not far from Cameroon which is the Democratic Republic of Congo, DRC is trade distance.
“Countries that are miles away, China and the U.S. are closer trade wise to Cameroon than DRC.
“Why is it that DRC is a trade distance is because there are issues with infrastructure? There are issues with essentially the connections and we need to address those binding constraints to Africa trading amongst themselves such as infrastructure.
“Some are hard infrastructure that we need to invest in improving links between our respective countries, others are soft infrastructure.”
The acting executive secretary also said protocols that had been approved and some that were in the pipeline needed to be mainstreamed and domesticated in national legislation.
“We still have situations where the customs departments are not aware. I mean, we are already trading within these AfCFTA trade regimes and they do not know what is the list of 90 per cent of products that can be traded without barriers or levies.
“We do not face problems in trading, and also communication about the AfCFTA needs to be improved within government departments,” he explained.
Pedro also added that information needed to reach the operators on the ground so when companies or individuals were exporting, they were not faced with all sorts of barriers. Naira Steadies as Banks Issue Update on FX Purchase