The Africa Continental Free Trade Area (AfCFTA) Secretariat has launched an APP that will link the continent’s Small Medium Enterprises (SME) and innovators to a global one-stop-technology platform for seeking possible sponsors for their projects.
The platform dubbed AfCFTA App will issue a mark of identity to every organization or businesses interested in benefiting from AfCFTA on easing ways of doing business and getting partnerships across Africa, export and import goods under the low duty regime, and satisfy some “know-your-customer” requirements at banks and financial institutions.
The App is the enabler of the broader AfCFTA Vision effort, an AU initiative in partnership with Sankoree Institute, an affiliate of AfroChampions. The two partners intend to propel AfCFTA to success with the backing of the continent’s development finance institutions.
“It is true that Africa has seen a number of trade agreements at regional level, but AfCFTA is different because it is being set up as the ultimate program to fulfil the dreams of the Founders of the African Union: a truly single market big and strong enough to compete for the biggest of global opportunities,” said Francis Mangeni, Director of Trade Promotion and Programs at the Accra-based AfCFTA Secretariat late last year. AfCFTA is the world’s largest trade bloc with a membership of 54 out of the 55 African Union nations.
Once fully operational, economists say AfCFTA would considerably expand intra-Africa trade whilst helping the continent move up the value chain in multiple industries, helping achieve the vision of Agenda 2063 of a united, prosperous, continent relating on equal footing with its peers on the global stage.
Although the continental block is now gearing up for the opening of the 1.2 billion people market, there are challenges on tariff concessions, rules of origin and trade in services. The Covid 19 pandemic led to six-month delays in launching the free trade area.
The 13th Extra-Ordinary Session of the Assembly of the Union (AU) held on December 5, under the chairmanship of President Cyril Ramaphosa of South Africa, stressed the need to quickly operationalise trading under AfCFTA to break the dominance of South Africa, Egypt and Nigeria that control 50 per cent of the African market.
Other hindrances to the effective implementation of AfCFTA, according to the Kenya Association of Manufacturers, include overlapping membership to regional trade blocs, underdeveloped transport infrastructure (road, rail and air), unfamiliar or different Customs and trade procedures, and weak value chains.
Tanzanian senior trade officer in the Ministry of Trade Ombeni Mwasha, told The EastAfrican last month that his country has delayed in ratifying the agreement because the pact had to undergo the “laid down” formal procedure of confirmation, which coincided with the October general election.
In Kenya, the government said the country is doing all the necessary internal preparations to exploit trade opportunities, including training businesses on how to trade in AfCFTA.
“AfCFTA is a young baby, and this baby is facing a lot of challenges, from Covid-19 to the economic consequences of the pandemic. Although AfCFTA has come into force, there are a number of areas that are still not concluded. These areas are important for the full realisation of the AfCFTA,” Kenya’s Principal Secretary in the State Department for Trade and Enterprise Development said in a recent interview.
Intra trade in the continent still remains low. It stands at 15 per cent, — comparing unfavourably with Europe at 68 per cent, North America at 37 per cent, and Latin America at 20 per cent — largely due to trade barriers, and poor transport and telecommunication connectivity.
Under the AfCFTA, liberalisation of trade is being carried out through regional trading blocs — the East African Community (EAC), Common Market for Eastern and Southern Africa (Comesa), Southern African Development Community (SADC) and the Economic Community of West African States (Ecowas) — which run separate Customs unions.