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Ruth Butaumocho
African Agenda
The setting up and the full operationalisation of the African Continental Free Trade Area (AfCFTA) is one of the strategic decisions the continent has made over the years in propelling trade and commerce in Africa.
Two years after its launch, efforts are being made to ensure the promotion of intra-trade in Africa, which inspired the AfCFTA’s formation is not lost to translation, but will live up to its billing.
It is for this reason that more than 100 representatives from African governments, civil society, United Nations and African Union officials met in Harare early this week, to discuss the role that AfCFTA can play in overcoming the peculiar challenges faced by developing landlocked countries and small island states.
The two-day event that was graced by several speakers from across the continent, unpacked a number of challenges faced by these countries, which needed the input of AfCFTA to holistically address and ensure that the affected nations will not be disadvantaged because of their geographical limitations.
Because of their geographical locations, 21 countries, Zimbabwe included, from the 46 countries that have ratified AfCFTA are most likely to face high transportation costs of their goods, because of their geographical location, while their counterparts can use the sea to transport goods.
The lack of access to the sea is a major hindrance to development, as countries often pay twice as much for transportation, while all their trading activities largely depend on the ports of other countries.
Transportation by each nature is capital-intensive, particularly when factored in as a cost in business.
It, however, becomes cheaper when goods are being transported by either rail or sea, which is the main mode of transport for the global trade, often touted as the lifeblood of global trade.
Ocean or sea is a preferred mode of transport for high volume and heavy cargo, such as minerals, metals, grain and other high-volume agricultural commodities, which are not economically reasonable to move by air.
Landlocked countries also depend on their transit neighbours’ markets, infrastructure and institutions, while moving goods, a process which can be costly, expensive and frustrating.
The meeting could not have come at a better time for the landlocked countries and small island developing states, whose involvement in continental intra-trade would be adversely affected by transportation costs because of their geographical location, if no proper solutions are put in place.
In outlining its framework, AfCFTA made it clear from the onset that it needed to break down geographical, logistical, and regulatory barriers to trade and investment, while enhancing productive capabilities, if the trade platform was going to succeed.
It is, therefore, heartening to note that the vision of the AfCFTA has not been lost, but is actually being accentuated to ensure that no country will be disadvantaged as was the case before when African states were trading at global trade platforms.
Apart from high trade tariffs that African countries were facing from major world economies, trade integration across the African continent had long been limited by outdated border and transport infrastructure and a patchwork of differing regulations across dozens of markets.
Some governments also had in place trade barriers to defend their markets from regional competition, making it more expensive for countries to trade with near neighbours than countries much further afield.
The issue of transportation of goods was proving to be a headache, more so for least developed countries, which had geographical barriers, further limiting free movement of goods.
Modelled along President Mnangagwa’s mantra that “no one and no place should be left behind”, the two-day deliberations offered an insight into the challenges that landlocked developing nations and least developed island states were likely to face, once AfCTA was to be rolled out without addressing the geographical impediments.
Speaking at the opening session, Ms Gladys Mutangadura, senior programme officer at the UN-OHRLLS, emphasised the importance of transport and connectivity, trade facilitation, use of advanced technologies to enable landlocked developing nations and least developed island states to easily integrate into large markets.
Many solutions can be found to reduce the challenges that landlocked countries face. However, they have to be realistic, cost effective, time conscious and mutually beneficial for countries involved.
In his contribution to the meeting, the executive secretary of the African Capacity Building Foundation, Mr Mamadou Biteye, highlighted three key considerations that would require urgent attention.
Creating effective and strong institutions; change readiness, innovativeness and inventiveness, while looking at individual cases of the affected nations, were highlighted as critical in addressing solutions faced by the 21 countries.
It is also important to remove market distortions for international trucking and promote incentives for quality and compliance, such that trucking companies that offer good services and do not break international transit and trade requirements can get toll gates rebates, after clocking certain mileage.
There is also need to reduce the time that trucking companies are on the road by introducing one-stop border posts, such as the Chirundu One Stop Border Post (OSBP).
From the time that it was launched in 2009, the southern region has already started to experience the benefits of the one stop border post through the significantly reduced processing times.
Periodic monitoring and evaluations that are conducted to establish the efficiency of the Chirundu One Stop Border Post reveal that the entry point has managed to achieve efficiency and effectiveness in border operations.
Lessons gleaned from the Chirundu One Stop Border Post show that if structured properly in terms of resources, technology and manpower, such border posts are crucial in facilitating trade by reducing the processing time at the border and hence reduce cross-border transactions which will enhance the region’s competitiveness.
The fact that the meeting took place under AfCFTA’s ambit is clear testimony that Africa is ready to trade among itself.
The vision is getting clearer that the full implementation of the trading platform will reshape markets and economies across the region and boost output in the services, manufacturing and natural resources sectors.
Many analysts feel that AfCFTA could turn out to be much more than a trading platform if thought, practices and possibilities are explored. They say that the trading platform should be viewed from various angles of advantages and opportunities, with the biggest of them all being that it can be an important tool for development.
By driving the continent’s integration, there is a general feeling that if implemented properly and in an inclusive manner, AfCFTA will result in wider and deeper regional value chain, which will in the long run form a strong foundation for a purely African economy, that Pan Africanists have always wanted.
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