The AfCFTA maze: why Customs holds the compass to continental trade

The grand vision of the African Continental Free Trade Area (AfCFTA), officially launched on January 1, 2021, has seen a rocky start. While AfCFTA trade commenced “on paper” on 1th January 2021, it’s only the Guided Trade Initiative (GTI) that kick-started the process, in October 2022. This pilot program, initially encompassing eight states representing the continent's five key regions (North, South, East, West, and Central) and a focused selection of commodities, aims to catalyze the implementation of the agreement. The program's objective is to expedite the operationalization of the AfCFTA agreement through the establishment of a centralized coordination mechanism designed to facilitate initial AfCFTA preferential trade transactions. Despite the GTI has significantly expanded its reach since its launch, it remains a limited and temporary mechanism, designed to be phased out as full-fledged AfCFTA preferential trade will gain momentum. But the critical determinant for this transition and indeed, the ultimate efficacy of the AfCFTA - a recent note from the International Monetary Fund warns - resides in the capacity of the continent's customs administrations to rapidly adapt to the new trade framework.

Customs bear a significant responsibility to the African trade community: they must ensure the swift and efficient processing of legitimate claims for AfCFTA preferential treatment. Effective handling of these claims is not merely an administrative task; it has the potential to create a virtuous cycle, encouraging greater uptake of the agreement, fueling trade growth, and ultimately delivering tangible economic benefits across the continent. Conversely, failure to streamline customs procedures risks perpetuating the current landscape of costly processes and inconsistent treatment of preferential consignments across borders. Such impediments could deter traders from capitalizing on the very advantages the AfCFTA seeks to offer.

This reality highlights the inherent duality within customs administrations – a conflict between their role to facilitate trade and their traditional mandate of revenue collection agencies. As James T. Walsh observed in his "Finance & Development" article, "New Customs", the emphasis on Customs as trade facilitators is met with skepticism by economic operators, given their historical mandate in pursuing administrative protectionist purposes. Their primary function, Walsh argues, remains revenue collection.

This tension is particularly pronounced in the African context. The IMF note 2025/002, titled “How to Modernize Customs Procedures to Successfully Implement the African Continental Free Trade Area”, highlights that within the AfCFTA framework, Customs are also tasked with safeguarding crucial revenue streams by ensuring preferential treatment is exclusively granted to compliant traders. The note implicitly warns that prioritizing this revenue protection mandate at the expense of trade facilitation responsibilities could significantly jeopardize the effective implementation of the AfCFTA.

So, what are the prerequisites for achieving a harmonious balance between these seemingly competing objectives? The IMF note argues that robust governmental support is paramount. This support must translate into tangible structural adaptations within Customs, by embracing modern technologies such as risk assessment and digitalization, implementing comprehensive training programs for customs officials, and actively dismantling administrative non-tariff barriers, as mandated by the AfCFTA agreement itself.

The note further cautions that without clear well-defined policies and administrative processes at national level that put a strong focus on trade facilitation needs, the effective implementation of the AfCFTA risks being elusive.

Acknowledging the inherent complexities of this undertaking, the IMF note offers an optimistic outlook. It suggests that tangible improvements in the Customs operational environment are realistically achievable within a one-year timeframe, provided that concerted efforts commence immediately.

In essence, while the AfCFTA holds immense promise for driving intra-African trade and fostering economic advancement, its realization hinges critically on the adaptive capacity and effectiveness of customs administrations across the continent in response to the agreement's trade facilitation provisions. Addressing persistent challenges related to procedural inefficiencies, inconsistent application of trade regulations, and constrained resource availability necessitates strategic policy interventions and substantial governmental support. Proactive adoption of trade facilitation measures by customs administrations, coupled with a resolute commitment to the reduction of non-tariff barriers, constitute critical determinants in the AfCFTA capacity to realize its full economic potential and deliver intended benefits to the African trade community and economy.