Building capacity to help Africa trade better

Comesa partner states upbeat about digital free trade area


Comesa partner states upbeat about digital free trade area

Comesa partner states upbeat about digital free trade area
Photo credit: Mwebantu

COMESA director of Trade, Customs and Monetary Affairs Dr Francis Mangeni spoke to Julius Barigaba about Africa’s first blockchain technology for clearing imports

COMESA is looking to roll out a digital free trade area – the first in Africa – modelled along the Malaysian Free Trade Zone, where parties to a transaction are connected in real time through a web of ledgers that are secure. 

The application also supports generation of an electronic certificate of origin whose authenticity can be verified using national information technology systems.

This will be a marked break from the current practice which involves manual applications and physical presentation of documents to tax bodies and other government agencies that cause businesses delays.

Q: How far is the rollout of the digital economic integration?

A: The ministers have approved the initiative.

The Secretariat completed the preparatory stage, from design to production of the key instruments especially the digital certificate of origin, presented them at several formal government meetings ranging from expert to ministerial level over the course of last year and early this year.

The Common Market for Eastern and Southern Africa will formally adopt the instruments at its upcoming summit in Bujumbura from June 1-10, then begin the digital free trade area.

Q: What type of feedback did you receive while promoting the digital FTA?

A: The feedback from technical workshops and meetings is positive. Last year at the Digital FTA workshop in Seychelles, every Comesa member state said that it was ready to start using the digital certificate of origin.

Customs authorities will have their work simplified once digitised, and users will face less complex procedures once the regulatory authorities begin to process clearances and approvals online.

Q: So far, who are the early adopters of the digital free trade area?

A: All member states. In fact, some countries such as Uganda, Rwanda, Kenya, Mauritius and Zambia are already issuing electronic certificates of origin; many are using the self-certification system which is more advanced, when trading with partners such as the European Union.

The self-certification system can be used in Comesa trade as well, because the Approved Economic Operators schemes [a certified standard authorisation issued by Customs office in the EU] already provide a basis for an important crop of users – companies that have met the criteria set by regulatory authorities such as revenue authorities, and can be considered credible and trustworthy.

Q: Still there must be fears, risks and challenges for businesses embracing the Digital FTA.

A: The challenges include the learning curve – regulators and businesses need to know the rules and the documents in order to use them correctly and beneficially.

There shouldn’t be much of a problem though as there is already some experience and familiarity among a good number of regulators and operators with digitised procedures and documents.

However, the capacity building will need to be a priority to assist new entrants in government and the private sector, as well as re-tooling or skills conversion given the nature of rapid advancement in technology as well as new regulatory instruments that could come up.

Risks are normal and are expected in all cases even with paper-based systems. This is why there is always reasonable power given to regulatory authorities to prevent crime and fraud, through risk profiling and management, investigations and cooperation with counterparts across the region and the world at large.

Q: What are the targets for Comesa’s digital FTA?

A: The attribution or causation link between programmes and initiatives such as the digital FTA on the one hand and poverty eradication and wealth and job creation on the other, need to be carefully thought through.

A realistic way to do this would be to sit down with economic operators and work out together their actual job and market projections over the short, medium to long term.

What we know well, though, from our analytical work based on actual figures and actual problems we have solved, is how time-based costs can be reduced through specific interventions, how exports and trade can grow through elimination of non-tariff barriers, and how businesses can thrive using regional markets.


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