UN Global Report for Digital and Sustainable Trade Facilitation shows African countries are doing well on trade facilitation

The Global Report for Digital and Sustainable Trade Facilitation is an annual report published by the United Nations that analyses the progress in facilitating trade and on digital trade in 163 countries from different regions of the world. The report recognizes the critical role that trade facilitation plays in supporting sustainable development, by enabling more efficient and transparent trade procedures, enhancing the resilience of global supply chains and decreasing overall trade costs. The 2023 edition of the report evaluates 60 trade facilitation measures (from the 58 of the 2022 edition), classified into 4 groups: 1) general trade facilitation; 2) digital trade facilitation; 3) sustainable trade facilitation and a residual one (4), called ‘other trade facilitation’. Each of such groups is further categorized into 11 subgroups covering both binding and non-binding measures embedded in the WTO Trade Facilitation Agreement (TFA), as well as measures that go beyond the scope of the WTO TFA. The subgroups, in turn, are categorized in individual measures (ex. publication of existing import-export regulations on the Internet) that in the case of binding measures included in the WTO TFA, show the relevant article of the agreement that regulates the measure (ex., in the case of publication of existing import-export regulations on the Internet, the relevant TFA article is art. 1.2).

The analysis shows that Sub-Saharan Africa, after the Pacific Islands, is the geographical area that mostly lags behind in the implementation of trade facilitation measures. However, the report also notes that Sub-Saharan Africa is the region where implementation rates have increased more this year, raising from an implementation score of 49.1% in 2022 to 57% in 2023, with an increase of 11 percentage points compared to 2021, when the score was only 46%. According to the UN, a partial explanation for the underperformance of Africa (and Pacific Islands), compared to other areas, is because of the geographical limitations of many countries in these regions, which face extra challenges for trade facilitation due to their size (which is particularly small), and to the remoteness from global markets or lack of access to sea-trading routes due to their landlocked status. Further, implementation of ‘paperless trade’ and ‘cross-border paperless trade’ measures remains low.

The Sub-Saharan Africa covered by the report are 38: Benin, Botswana, Burkina Faso, Burundi, Cabo Verde, Cameroon, Comoros, Congo, Côte d’Ivoire, Democratic Republic of the Congo, Equatorial Guinea, Ethiopia, Gabon, Ghana, Guinea, Guinea- Bissau, Kenya, Liberia, Madagascar, Malawi, Mali, Mauritania, Mauritius, Mozambique, Namibia, Niger, Nigeria, Rwanda, Senegal, Seychelles, Sierra Leone, Somalia, South Sudan, Sudan, Tanzania, Togo, Zambia and Zimbabwe.

In particular, the areas of trade facilitation where African States remain particular weak are: the institutional arrangement and cooperation (i.e., organizational frameworks that such States have in place for efficiently managing governmental activities and coordinating their border agencies) and cross-border paperless trade, where bad performers are many: Gabon, South Sudan, Comoros, Equatorial Guinea, Guinea, Guinea-Bissau, Somalia, Burundi, Burkina Faso, Democratic Republic of Congo, Ethiopia, Zimbabwe and (surprisingly) Cote d'Ivoire and Botswana. Concerning this last indicator, particularly disappointing is the situation of South Sudan (same for paperless trade measures, which are indicated as not existing in this country), Gabon, Comoros and Equatorial Guinea, where its value is practically zero. Instead, regarding the transparency of information on policies and regulations on trade, on average, all African States have improved with respect to 2022, even though some of them like the Democratic Republic of Congo, Senegal, Nigeria and Gabon, lag behind, compared to other African States (as shown in the figure 1 below).

Figure 1: Average implementation rates of trade facilitation measures in Sub-Saharan Africa

Particularly low is also the state of implementation of trade finance facilitation measures, which points out a significant trade finance gap in Africa that continues to hinder full inclusion in international trade especially of SMEs, as shown in figure 2 below.

Figure 2: Status of implementation of trade finance facilitation measures in the various regions

In this regard, the report notes that Single Window systems, which electronically link various agencies with distinct roles, in many countries do not readily connect financial institutions (such as banks) and financial authorities (like Foreign Exchange Authorities).

The conclusion is that the level of implementation of trade facilitation measures in Sub-Saharan Africa is still weak, being the implementation rate very far from the one of developed economies, which is 85%, and second only to the Pacific Islands (Fiji, Kiribati, Micronesia, Nauru, Palau, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu and Vanuatu), that register the lowest performances in the world (42%), as shown in figure 3.

Figure 3: Average implementation rates of trade facilitation measures around the world