Topics publications: African regional integration
Trade Briefs
ICT Policy Choices and Digital Development in Africa
Information and Communication Technology (ICT) policies are a key driver of ‘digital development’ – the extent of integration of a country or region into the global digital world and digital economy. This is because communication, information flows, trade, business, education, finance, industry and even government are today inextricably founded in the digital world.
The ‘digital divide’ refers to the gulf between developed and developing nations in terms of digital penetration in countries and regions. However, the digital divide does not only refer to the divide between regional aggregates and countries, but to the divide that is found within countries too. Several African countries have ‘dualistic’ economies, characterised by a modernised urban sector and poor and underdeveloped rural sector. This economic dualism extends as well to digital penetration, with urban areas covered by fixed and mobile broadband, while many rural areas have little to no connectivity at all. Today, Africa lags behind the global aggregate in terms of digital development and the digital divide, but its rate of improvement is such that it is converging to global aggregates at an admirable pace.
Key to the furtherance of digital development is well thought-out and implemented policies. This is the responsibility of the national authorities that oversee the telecommunications industries – usually departments of communication – but other branches of government can impact the sector too, such the tax authority. This trade brief presents some metrics around progress in digital development in Africa, which has been progressing well, before examining some principles and case studies around ICT policy formation and implementation.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Review of Africa’s Road Transport Infrastructure
The implementation of the African Continental Trade Agreement (AfCFTA) has the potential to contribute to achieving a key objective of the AfCFTA, by boosting intra-Africa trade. The transaction costs of intra-Africa trade depend quite notably on road transport, making the state of Africa’s road transport a key concern. Recent studies show that the majority of roads on the continent are still unpaved. According to the National Bureau of Economic Research, Sub-Saharan Africa is covered by 31% of the total kilometres of paved road per 100 square kilometres of land, which is the lowest in the world. To address this issue, various road transport infrastructure development programmes have been planned by states, continental and international organisations. Efficient road transport infrastructure reduces transport costs. This trade brief will provide a review of existing road transport infrastructure in Africa and will examine select new road development projects.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
The SADC Protocol on Trade in Services enters into force – what is in it for services trade and for services suppliers?
The Member States of the Southern African Development Community (SADC) agreed to liberalise trade in the service sectors in efforts to enhance regional integration and the creation of a regional single services market. The services liberalisation ambition is articulated in the objective of the SADC Protocol on Trade in Services (PTIS), signed in 2012 and which entered into force in January 2022. It provides for the creation of a liberalised single services market, through the removal of substantially all trade barriers, in all commercial or tradable services and any services sector, for equitable market access based on mutual benefits across the membership.
The SADC liberalisation programme envisages a progressive process whereby the Member States undertake sector-specific commitments, through successive rounds of negotiations; and the results thereof (i.e., the agreed List of Member States’ Commitments), upon their adoption by the Committee of Ministers of Trade (CMT), will be annexed to, and form an integral part of, the PTIS. After a lengthy negotiation process, the CMT adopted the final agreed and legally scrubbed List of Member States’ Commitments in two batches. The June 2018 package covered the horizontal commitments and sector-specific commitments in the communication, financial, tourism and transport services together with five annexes. The July 2019 package consists of the List of Commitments in the construction and energy-related services and an Annex providing for pro-trade regulation of postal and courier services. In 2021 the CMT adopted the Negotiating Guidelines for the second round negotiations which shall, among others, cover negotiations in the remaining services sectors, i.e., business, distribution, education, environmental health and related social services and the recreational, cultural and sports services.
This Trade Report elaborates the obligations and rights of the Member States and businesses that are in the SADC PTIS, and in particular unpacks the results of the first round of negotiations and business opportunities arising from the List of Commitments in the six priority sectors. The objective is to assist researchers, businesses, and other stakeholders in the region to understand and make use of the Member States’ List of Commitments, which use some technical jargon, often difficult for stakeholders outside the trade negotiation forum, to apply in their daily business operations.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Africa and the adoption of HS2022: Implementation update, impact and consequences in the context of AfCFTA
The new edition of the Harmonised Commodity Description and Coding System 2022 (HS2022) entered into force on the 1st of January 2022. This development means that Customs tariffs, associated Information, Communication and Technology (ICT) management systems – such as the Automated Systems for Customs Data (ASYCUDA) – as well as accompanying Harmonised System (HS) tools and instruments must have been successfully migrated from the previous edition (HS2017) to the new version (HS2022).
A few weeks prior to entry into force of HS2022, African countries’ experiences in this regard still indicated widely ranging inconsistencies and discrepancies in the application of the HS in general. Whilst all the Contracting Parties were expected to have fully migrated to the HS2017 by then, apparently some had not yet done so. The majority of those were still either using HS2012 or even HS2007, whilst some had huge delays in rolling out HS2017. Only 30 African countries had successfully migrated to HS2017 and were already applying it. At the launch of the operational phase of the African Continental Free Trade Area (AfCFTA) during the 12th Extraordinary Session of the Assembly of the Union on the AfCFTA in Niamey, Niger held on the 7th of July 2019, HS2017 was already in its third year. At that time, half of the African Union Member States were still to ratify the AfCFTA.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
State of Intra-REC Trade and Trade Liberalisation
Regional Economic Communities (RECs) are major building blocks in the realisation of the African Continental Free Trade Area (AfCFTA) according to the Governing Principles of the AfCFTA. It is stated that the AfCFTA shall also be governed by the ‘preservation of the acquis and best practices in the RECs, in the State Parties and International Conventions binding the African Union’. This is important when looking at tariff concessions.
This Trade Report provides an update on the state of intra-REC trade amongst the eight RECs recognised by the African Union and the level of tariff protection that still exists between RECs. This update follows a previous analysis undertaken by tralac five years ago. In the previous analysis, trade was concentrated within RECs (intra-REC) even in RECs where there were no free trade agreements (FTAs). This is mainly attributed to fact that where no FTA exists, proximity and other factors have led to market integration and the development – to a greater or lesser extent – of an integrated commercial space. As the AfCFTA is being implemented, this becomes crucial and underlines why the non-tariff agenda is so important (lowering costs of doing business between those that are negotiating tariff concessions). The current analysis will shed light on the extent to which deeper intra-REC trade in goods has progressed.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
Eight Types of Provisions to Make the AfCFTA Investment Protocol Gender-Responsive
The ongoing negotiations of the African Continental Free Trade Area (AfCFTA) Investment Protocol present a unique opportunity to make intra-African investment work for women by designing a gender-responsive legal framework. This requires an ex-ante assessment, examining how foreign direct investment (FDI) flows affect men and women and identifying the risks and opportunities they generate for both genders. Following this assessment, corresponding measures must be identified to ensure that the gender inequalities are not exacerbated by the increase of intra-African investment, and these should be reflected in the intra-African investment legal framework.
This Trade Report proposes eight types of provisions for the AfCFTA Investment Protocol to guide the intra-African investment regime towards sustainable development and gender equality. The suggestions are consistent with the emerging trend of better balancing investment protection, investors’ rights and obligations, and sustainable development objectives within international investment agreements (IIAs). For example, the Protocol could include gender equality as one of the objectives, reiterate commitments to non-discrimination and equal pay in labour provisions, set out the implementation of a gender equality policy in corporate social responsibility (CSR) obligations, include gender considerations within the social and environmental impact assessments, or provide for gender parity in the appointment of arbitrators.
These types of provisions aim to increase the accountability of investors to ensure that their activities are consistent with sustainable development and promote gender equality. Governments also have a key role in reconciling international investment with improving living standards and supporting women’s economic empowerment. A gender-responsive business and working environment are critical to enabling women to take full advantage of the opportunities generated by foreign investment flows and to increasing their participation in trade and the development process of African states.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
The Trade Remedies and Safeguards Regime of the AfCFTA
The African Continental Free Trade Area (AfCFTA) Agreement contains detailed provisions on trade remedies and safeguards, modelled on World Trade Organisation (WTO) principles. Since only a small number of African States are active users of trade remedies and safeguards, their wider application could bring about an important trade governance development. Disputes about trade remedy investigations and measures could also become more likely. Disputes will involve domestic judicial review proceedings as well as inter-State disputes. The latter will fall under the jurisdiction of the Dispute Settlement Mechanism of the AfCFTA.
How will the AfCFTA trade remedies and safeguards arrangement work? This paper addresses this question, mentions the applicable multilateral rules, and discusses the African trade governance context, including whether there might be a more active use of trade remedies and safeguards under the AfCFTA. It starts with the question why international trade agreements provide for trade remedies and safeguards.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
How will the Trade Remedy Regime of the AfCFTA impact on Trade Governance?
The legal instruments of the African Continental Free Trade Area (AfCFTA) provide for a detailed regime to implement Trade Remedy and Safeguard measures. One gets the impression that this aspect of trade governance could be an important new continental development, even though very few African States are active users of these measures. How will the AfCFTA trade remedy regime work and what may change? Will the AfCFTA bring about a dedicated intra-African Trade Remedy and Safeguards arrangement? How may such a development impact on African countries’ ability to use multilateral Trade Remedies and Safeguards?
This Trade Report analyses Trade Remedies and Safeguards in the African trade governance context. It discusses the AfCFTA legal instruments provided for in this regard, which are modelled on World Trade Organisation (WTO) principles and procedures.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Briefs
Should the RECs disappear in order to have the AfCFTA?
There are high expectations about the benefits that the African Continental Free Trade Agreement (AfCFTA), an ambitious and comprehensive plan for the establishment of a continent-wide free trade area, could bring. According to the World Bank, as African economies continue to struggle to manage the consequences of COVID-19, the AfCFTA can provide an anchor for long-term reform and integration. Expectations for real income gains and the lifting of nearly 100 million people out of extreme and moderate poverty are, however, conditional on effective implementation once all foundational elements of the Agreement have been concluded.
As at October 2021, tariff schedules, rules of origin, and conditions for trade in the five priority services sectors are still being negotiated. Once in place, the private sector and investors can expect preferential trade and opportunities for doing business across Africa’s many borders to become a reality. That is, after all, the raison d’être of the AfCFTA.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the authors and do not purport to reflect the views of tralac.
Trade Reports
How will Disputes be resolved under the AfCFTA Dispute Settlement Protocol?
One of the first accomplishments of the African Continental Free Trade Area (AfCFTA) negotiations was the adoption of the Protocol on Rules and Procedures on the Settlement of Disputes. It was agreed during Phase I of the AfCFTA negotiations, together with the Protocols on Trade in Goods and on Trade in Services. It has recently been expanded by adding rules of procedure for the AfCFTA Dispute Settlement Body (DSB) and a Decision to formally establish the Appellate Body and to consider an update on State Party nominations to the Indicative List of Panellists.
The Dispute Settlement Protocol is a detailed document that allows for the settlement of disputes among the State Parties about the interpretation or application of any of the AfCFTA’s legal instruments. The general design of this regime replicates that of the World Trade Organisation (WTO) but it also contains some unique elements. This paper discusses the main features of the Dispute Settlement Mechanism of the AfCFTA and some of the implications for trade governance. If this Dispute Settlement Mechanism modifies the traditional intra-African approach to how disputes about trade-related issues are resolved, it could bring about major changes to trade governance on the continent.
Readers are encouraged to quote and reproduce this material for educational, non-profit purposes, provided the source is acknowledged. All views and opinions expressed remain solely those of the author and do not purport to reflect the views of