Smoothing the way for African trade is critical if the continent has to tackle the challenges posed by fast-shifting patterns of global commerce, United Nations Conference on Trade and Development (UNCTAD) secretary general Mukhisa Kituyi said recently in Addis Ababa. He was in Ethiopia for the first African Forum for National Trade Facilitation Committees.
The forum at the UN Economic Commission for Africa (UNECA) discussed how to reduce trade hurdles in the continent. It is part of efforts to implement the World Trade Organisation’s (WTO) Trade Facilitation Agreement, which entered into force in February 2017 and could help drive down the cost of commerce, according to an UNCTAD press release.
It also comes amid new momentum provided by the African Continental Free Trade Agreement (AfCFTA), a landmark for regional integration that was signed in March 2018.
“Africa faces a moment when the market access gains that have been negotiated over the past two decades can be severely eroded unless we address the challenges of trade facilitation,” said Kituyi.
He emphasized that Africa’s competitive labour advantage must be accompanied by quality transport hubs, efficiencies in the cross-border movement of goods and services, better procedures at ports, and a predictable regime of logistics management.
Overall, the WTO calculates current trade costs for developing countries are equivalent to applying a staggering 219 per cent tariff on their international trade, and that full implementation of the Trade Facilitation Agreement could cut trade costs for Africa.
“It could add 2.7 percentage points per year to world trade growth and more than half a percentage point to world GDP. The biggest benefits would accrue to developing countries,” WTO director general Roberto Azevêdo said.
“In Africa estimates show that full implementation of the agreement could reduce trade costs by an average of 16.5 per cent - by doing that, it has the potential to deliver a huge economic boost for the continent,” he said.
The forum is the first of events globally to support implementation of the WTO’s agreement, which besides measures to boost trade also addresses improved revenue collection, safety and security compliance controls, including for food, and streamlining government agencies.
The reforms aim to help small cross-border traders, often women, enter the formal sector, make economic activities more transparent and accountable, promote good governance, generate better quality employment, strengthen information technology capabilities and generally modernise societies by bringing about benefits related to administrative efficiency.
The three-day forum, which ended on November 29, was supported by the Commonwealth, the European Union, Danish development agency Danida, the Government of Finland, and the Islamic Development Bank. (DS)