Africa trade facilitation challenges need to be addressed, says Unctad

The United Nations Conference on Trade and Development (Unctad) warns that market access gains made by Africa in the past two decades can be eroded unless the challenges of trade facilitation are addressed.

Better transport, logistics and foreign investment are essential to smooth the way for the African continent to reduce trade hurdles, Unctad asserted at the start of a three-day forum, taking place at the UN Economic Commission for Africa (Uneca) in Addis Ababa, Ethiopia.

The first African Forum for National Trade Facilitation Committees, which concludes on Thursday, aims to implement the World Trade Organisation’s (WTO) February 2017 Trade Facilitation Agreement and tackle fast-shifting patterns of global commerce to help drive down trade costs.

Amid new momentum provided by March’s landmark African Continental Free Trade Agreement (AfCTA) Unctad secretary-general, Mukhisa Kituyi, emphasised that Africa’s competitive labour advantage must be accompanied by quality transport hubs, more efficient cross-border goods and services movements, better port procedures and predictable logistics management.

“If Africa is going to trade with itself, we have to make sense of what main roads and railways are to be built to connect African producers and consumers,” Kituyi argued, stressing the need for well-functioning trade committees, infrastructure and investment.

The WTO calculates that trade costs for developing countries are equivalent to a staggering 219% tariff on their international trade.

WTO director general Roberto Azevêdo said the reduction of trade costs with the Trade Facilitation Agreement is “striking.”

Azevedo said that African estimates indicate that by fully implementing the agreement trade costs could be reduced by an average of 16.5%, potentially delivering “a huge economic boost for the continent.”

Projections show the value of intra-African trade to be between 15% to 25% higher in 2040, compared to a situation with no AfCTA.