Trade facilitation in the context of regional integration in Africa

In the end of August 2022, the Nelson Mandela School of Public Governance hosted a virtual webinar on Trade Facilitation, Climate Finance, and the Strengthening of Africa’s Development Finance Institutions as part of the African Continental Free Trade Area (AfCFTA) and Transformative Industrialisation Webinar Series. A summary report of the event, just published, summarises the outcomes of the first session.

Trade facilitation is a term that has become fashionable in recent years. It encompasses a broad spectrum of measures aimed at reducing the financial costs, time and efforts required to move goods across borders, so to expedite their movement, clearance and release. This is particularly important for developing countries, which usually have a more closed and opaque trade environment. Examples of such measures are the electronic exchange of data among border agencies, the simplification and harmonisation of trade documents  and other practices aimed at facilitating the mobility of goods and services across borders.

The AfCFTA Protocol on Trade in Goods has 9 annexes, one of them (n. 4) specifically dedicated to trade facilitation. This Annex basically mirrors the World Trade Organization (WTO) Trade Facilitation Agreementreplicating the measures already recommended by this text. Annex 4, among others, urges State parties to establish National Trade Facilitation Committees (NTFC) to oversee the implementation of applicable trade facilitation reforms, even though such bodies are not mandatory.

But Annex 4 is not the only Annex dealing with trade facilitation. Other two annexes to the AfCFTA contain measures aimed at facilitating trade. These are the Annex 3 on Customs Co-operation and Mutual Administrative Assistance and the Annex 8 on Transit.

Another aspect highlighted by the Nelson Mandela School of Public Governance report is the corridor approach that is currently pursued in Africa to stimulate growth, trade and investment along key transport routes. The AfCFTA Committee on Trade in Goods (CTIG), the report notes, has established a specific Sub-Committee that meets annually to review developments and follow up on progress on all trade facilitation annexes. One of the CTIG biggest priorities is to implement the corridor approach in Africa, by focusing interventions on key strategic corridors deemed essential to promote regional integration. The Abidjan-Lagos Corridor is cited as an example.

Another topic addressed by the report is the Non-Tariff Measures (NTMs). Generally, NTMs are defined as “policy measures, other than ordinary customs tariffs, that can potentially have an economic effect on international trade in goods, change in quantities traded, or prices, or both.” They include both Technical Barriers to Trade (TBT) and Sanitary and Phytosanitary (SPS) measures, as well as “non-technical” measures, such as quantitative restrictions (quotas, non-automatic import licensing), price measures, forced logistics or distribution channels, and so on, as explained in this post on the OECD website.

The AfCFTA has adopted its own definition of NTMs, indicated as “barriers that impede trade through mechanisms other than the imposition of tariffs.” Unlike tariffs which are generally published in national schedules and, thus, easily identified and quantified, NTMs are more challenging to detect. The report mentions the tradebarriers.africa online portal among the initiatives developed to facilitate the identification of such measures in Africa. However, the report notes, one of the most significant challenges to making this tool effective is the lack of awareness by traders, resulting in its (still) low level of utilisation.