49 out of 55 African countries have signed the African Continental Free Trade Agreement (AfCFTA), a framework for creating a single continental market for goods and services. When at least 22 countries ratify it, the AfCFTA will officially enter into force, potentially making the continent the largest trade union in the world.
Dr. Mukisa Kitui, UNCTAD Secretary-General.
Dr. Mukisa KituyiThe Secretary-General of the United Nations Conference on Trade and Development (UNCTD) explained what countries can expect and what challenges await them. [excerpts]:
African Renewal: At a time when some Western countries are becoming protectionist, what do you say about Africa’s efforts to become a free trade zone?
Dr. Mukhisa Kitui: For Africa, making a clear decision to expand trade between us is an important step. Uncertainty in international trade raises profits on trade in subcontinental Africa. Second, what we have learned from the rest of the world is that despite populist protectionism, we are riding a short-term phase. But even as we wait for Africa to learn from the experience of East Asia and Latin America in protectionism, we need to build effective trade capacities along regional value chains.
Africa’s intra-regional trade strengthens its trading capacity. The experiences gained from that will provide greater market share globally. Africa must build the necessary capacity and structural change to become a competitive global player.
Therefore, the creation of a continent with a free trade area is a crucial step in building the competitiveness of African manpower and African products both domestically and internationally.
What are the three fastest gains for an African country in a free trade environment?
All studies show that what Africa sells within Africa is worth more than what Africa sells to the rest of the world, which is mostly raw materials. This means that trade within Africa creates more jobs in the source country than Africa trades with the rest of the world. We want to find more industrial and value-added jobs in Africa. Secondly, it builds competitiveness, which you can promote against the rest of the world. Third, we will eliminate domestic market distortions that are increasing the burden on domestic consumers due to excessive protectionism.
One of the major challenges to trade in Africa is non-tariff barriers. When there is a lack of political goodwill, excuses are made to delay business.
Will AfCFTA affect UNCTAD’s activities in Africa? Do you, for example, deal with individual countries as one entity with the continent?
On a personal level, I was involved in designing the architecture for the AfCFTA, so I was working with that from day one. As an organization, UNCTAD not only encourages the African Union to create a free trade environment, but we have been training negotiators for regions and countries.
All studies show that what Africa sells within Africa is worth more than what Africa sells to the rest of the world, which is mostly raw materials.
This technical support to national negotiators was a role we played before the African Union and we now continue to strengthen as we prepare for the next phase of building a continental common marketplace for electronic commerce, which will focus more on services than goods. . We are therefore working with African Union member states and entities to build capacity and translate AU commitments into tangible economic gains.
Tariffs alone are not a major barrier to trade in Africa. Poor infrastructure and low levels of manufacturing in some countries mean they do not produce large quantities of finished products for export. What’s your take?
Tariff is not the only problem, it is the main one. There are many obstacles to realizing the potential of trade in Africa. But the claim that we produce the same goods is not true. Even neighboring villages trade. I come from a place near the border of Kenya and Uganda and I know from the first time that we trade with our neighbors.
Africa trades a lot across borders. For example, there is a large market for East African tea and coffee in West Africa. There is a large market in East Africa for plantains and exotic produce from West Africa. There is a huge market for the creative industry in the rest of Africa, for example, Nigerian films and music.
Africans have an amazing capacity for intercontinental trade. Similarly, trade is not constant. For example, there is no law that says a country like Tanzania must only trade in a certain set of products. Countries always build capacity and opportunity, and innovators come up with new products that you add to the market. Thus, diversification is adopted as trade promotes economic interaction.
What about infrastructure challenges?
True, we have colonial infrastructure, a railway from Kasese in Uganda to an Indian Ocean port to export copper. Integrated infrastructure is a critical consideration for business in Africa, and I am glad something is being done about it. Currently, the road from Cape Town to Cairo is blocked as far as Addis Ababa. There are other initiatives, such as the Northern Corridor, and the Chinese are encouraging investments to build a road from Kampala to the Atlantic Ocean. I see the importance of the railway from Dar es Salaam to Rwanda and so on. Therefore, the integrated infrastructure being built today will be ready to test the infrastructure challenges of tomorrow.
What are the main challenges of doing business in Africa?
One of the major challenges to trade in Africa is non-tariff barriers. When there is a lack of political goodwill, excuses are made to delay business. Many times merchants arrive at the border and say, “This product looks too old to sell to us,” or “The quality doesn’t seem right,” or “We can’t confirm that this was made in your country.” ” Lack of goodwill leads to the use of many non-tariff measures as an excuse to delay trade. Developing goodwill requires rolling back non-tariff barriers and increasing trade between African countries.
Doesn’t this have more impact on women traders?
Last month I published a study on gender and trade in East Africa that was completed in Nairobi. It is true that women face more challenges than usual in cross-border business. Sometimes they become victims of sexual assault and harassment. Sometimes small traders fall victim to a typical problem because the East African Integration Architecture states that a 40-foot container from Dar es Salaam to Nairobi is a regional trade, but 20 kg of maize is “smuggled”. items”
We want to find more industrial and value-added jobs in Africa.
What should be done?
Agreements have always existed, but there has not been enough political advocacy to protect the interests of small traders, especially artisans and women traders, in cross-border trade. They are not breaking any laws, but it is frustrating that the authorities do it arbitrarily and with impunity.
Trade agreements can take years to feel the impact. When, realistically, are all countries expected to come on board and start implementing the AfCFTA?
If there is enough political goodwill, it can be done overnight. There is no reason to repeat the mistakes made by other countries. We need to learn and then develop these processes within existing regional integration strategies. Expand best practices.
Are there benchmarks to assess progress?
What are the areas of improvement we need to ask? What are the issues being addressed in policy and operations? For example, I hope there will be more gender studies on integration and trade that unlock the potential of women entrepreneurs. Most small business owners in Africa are women, but the regional business structure favors men rather than women. So we’re holding back one of our most important coordinators.
Source: Africa Renewal