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Desiderio Consultants Ltd. is a think tank and a network of independent professional international development consultants established to promote and influence customs & trade-related policies in African nations to achieve trade facilitation reforms aimed at improving international and regional trade
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What is needed for the AfCFTA to be successful: a perspective from African CEOs

An article published by the Chairperson of the Pan-African Private Sector Trade & Investment Committee (PAFTRAC) gives a summary of the outcomes of the recently adopted PAFTRAC CEO Trade Survey 2022. The report reveals that in order to take full advantage of the African Continental Free Trade Area (AfCFTA), African companies need that three key conditions are in place:

1) cross border trade has to be facilitated by AfCFTA State parties by removing unnecessary barriers and by harmonizing product standards and product testing procedures among themselves, as they currently vary from country to country. The PAFTRAC survey suggests that, awaiting their harmonisation, African companies need to receive capacity building on how to comply to quality standards and other requirements that their products need to fulfil in order to access to other African markets. Moreover, in order to increase the appeal of such products to African consumers, support is needed in improving their packaging. In this post we discussed about the widespread perception by Africans that imported goods have a higher value compared to locally-made products.

2) access to capital and payment systems needs to be facilitated and to be cost-efficient. In this regard, the article notes that African companies have difficulty to access to capital, which hinders their expansion and compromises their sustainability. Regarding the facilitation of payments, the recent launch of the Pan-African Payment and Settlements Systems (PAPSS), is a good step in this direction. The PAPSS allows African importers to make real-time payments to their suppliers, by eliminating the need to convert the amount to be transferred to their counterparts in a third (hard) currency first, such as US dollars or Euros. In doing so, the PAPSS reduces transaction times and costs (because of the elimination of the currency conversion commissions), so stimulating intra-continental trade.

3)  better trade infrastructure and logistics is necessary, so that goods can move from one African region to another as seamlessly as possible. The appeal to African governments is to increase spending in trade-enabling infrastructure, such as roads, ports and warehousing, also by leveraging on private sector expertise and resources.

Information, as indicated by survey respondents, will be also essential to AfCFTA's success. African traders wait with great enthusiasm the imminent launch of the African Trade Gateway, a digital platform developed with the support of the Africa Export-Import Bank that will aggregate information on rules applicable to products exchanged among African States, customs procedures, market information and trends, and payment transfers by integrating in a single portal the current PAPSS, MANSA and ATEX platforms. This is exactly the type of innovative information tools that African entrepreneurs need to harness the opportunities offered by the new Continental Free Trade Area.

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