Building capacity to help Africa trade better

Some reflections on Africa Day 2020, COVID-19 and the AfCFTA


Some reflections on Africa Day 2020, COVID-19 and the AfCFTA

Some reflections on Africa Day 2020, COVID-19 and the AfCFTA

We will all remember Africa Day 2020. Africa Day, which we have been celebrating on 25 May each year since the establishment of the Organisation of African Unity (OAU) in 1963, and its transformation into the African Union in 2002, is different this year. Today, Africa Day prompts us to reflect on the havoc that COVID-19 is wreaking not only across the continent, but across the world.

The COVID-19 pandemic has very quickly precipitated the most severe global economic crisis for more than a century. For Africa, it is a development disaster. The disease and even more importantly, governments’ measures, policy responses and regulations to curb its spread, have erased livelihoods on a massive scale. Millions of individuals, families and households across the continent are being pushed behind – there are no safety nets for informal cross-border traders or micro entrepreneurs. In fact, in some African countries, safety nets barely exist. The very sorry state of our healthcare systems and institutions to manage such a pandemic have been starkly exposed. We need a fundamental rethink of so many currently-accepted trade and development policies and practises. We need to assess the vulnerabilities in our economies and societies. The weak links in our policies, regulations and development strategies are being exposed as never before.

While government measures and responses to the COVID-19 pandemic make the usual Africa Day celebrations impossible, we hear that many are embracing digital platforms to listen to broadcasts by Presidents, participate in continental workshops and music concerts. We now know it is possible to have policy discourses among stakeholders, to make and implement policy and regulations, and to trade with the support of digital solutions. Many of Africa’s youth – especially in urban areas – are already well-versed in the use of social media for personal and entrepreneurial engagements. But many in more remote areas, for example, will not be able to access e-learning solutions that have ensured that learning in most developed countries and more developed regions on the continent, can continue learning during this time. COVID-19 is providing a push into the digital economy today and more generally during this time of crisis. It is noteworthy that the African Union put pdf The Digital Transformation Strategy for Africa (1.80 MB)  in the public domain exactly a week ago, today.

This strategy is anchored on several pillars – an enabling environment, policy and regulation (including privacy and protection of personal information and cybersecurity), digital infrastructure, digital skills and human capacity, amongst others. Our experience during this pandemic is prompting us to recognise potential benefits from digital developments, and why the development of a digital transformation strategy is so important.

Restrictions on cross-border trade and delays at border posts, especially for land-locked countries that are dependent on their neighbours for essential supplies of medical equipment and food, can be significantly eased by the adoption of digital trade facilitation measures. E-certificates for rules of origin, sanitary and phyto-sanitary standards, electronic payments for border charges and many more should be adopted not only now, during the pandemic; they should be integral to our comprehensive digital trade – and specifically trade facilitation – strategies. This should be the way we do business on the continent across borders, and with global partners.

In some quarters, it is lamented that the African Continental Free Trade Area (AfCFTA) negotiations have all but stopped, and that trade under the AfCFTA regime will not begin on 1 July 2020. Careful scrutiny of the negotiations process reveals that the initial impressive momentum of negotiations had already slowed down well before the pandemic struck. This was not a surprise – negotiations had reached very sensitive and difficult negotiating issues. The import tariff is a very sensitive trade policy instrument – both because it is an important source of revenue for some countries, but also because it is a very effective means of keeping import competition out of domestic markets. And rules of origin serve not only their primary purpose of preventing transhipment, but can also be very effective in keeping import competition out of home markets. So, it was to be expected that when these issues came to the negotiating table, the process would slow down. Since preferential tariff concessions and preferential rules of origin are the two basic requirements for a free trade area (in goods) – trade under the AfCFTA regime cannot begin without them.

The AfCFTA is the last round, so to speak, in Africa’s integration agenda. Continental integration was envisaged by the founders of the Organisation of African Unity and the African Union, and the Abuja Treaty sets out a step-wise process for establishing an African Economic Community (AEC). A continental free trade area was not part of that plan – it became a new pathway towards AEC, adopted in 2012, with a more immediate objective of boosting intra-Africa trade. If the AfCFTA is going to achieve its objectives, to support Africa’s integration into the global economy, enhance competitiveness and support the development and diversification of the continent’s productive capacity, it should not be rushed now. Africa deserves a continent-wide free trade agreement that addresses the real challenges that the continent is facing, not only now, during the pandemic, but more generally in a digital 21st century. We know that non-tariff barriers are far more pernicious impediments to intra-Africa trade than tariffs. COVID-19 is serving to bring into very sharp relief this reality, and many other lessons about trade and integration on the continent and in the global economy. And ironically, the pandemic is providing an important opportunity to reflect and appraise where we stand in the AfCFTA negotiations, and to recalibrate where necessary. Let’s not miss this opportunity.

About the Author(s)

Trudi Hartzenberg

Trudi Hartzenberg

Trudi Hartzenberg is the Executive Director of tralac. She has a special interest in trade-related capacity building. Her research areas include trade policy issues, regional integration, investment, industrial and competition policy.

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