AfCFTA Year Zero Report by The AfroChampions Initiative
An Assessment of African Governments’ Commitment and Readiness for AfCFTA Start of Trading in light of COVID-19
This assessment which was completed before COVID-19 struck, showed that despite the euphoria, AfCFTA commitment and implementation readiness of African governments are surprisingly below 50%. COVID-19 now threatens to derail AfCFTA – which is the more reason the continent should press ahead and use AfCFTA as one of the weapons to beat COVID-19 and speed up post-COVID economic recovery.
The rankings by AfroChampions sought to answer two questions: which countries are the most committed to the AfCFTA process. And which countries have the best implementation readiness in terms of trade infrastructure, customs efficiency and access to credit.
The most AfCFTA committed country is Rwanda which scores 83.93% on the commitment scale; and the least committed country is Eritrea with a score of 0.85%.
The country with the best implementation readiness is South Africa, with a score of 68% on the implementation readiness scale. South Sudan has the lowest score for readiness. The overall average commitment level of the continent to AfCFTA is at 44.48%; and its overall implementation readiness level is at 49.15%.
Some of the most committed countries (such as Ghana, Mali, Togo and Uganda) are not necessarily the most prepared in terms of trade infrastructure, customs efficiency and access to credit for industry. Conversely, some of the least committed countries (such as Botswana, Namibia and Tanzania) performed very strongly in terms of implementation readiness.
A note on the indicators used:
Commitment to the Free Trade Agreement/Treaty (Signing and ratification of AfCFTA and a publicly accessible national AfCFTA implementation strategy).
Commitment to Free Movement (Signing and ratification of Protocol on Free Movement of people and country’s Visa Openness).
Trade Facilitation Readiness (quality of trade-Infrastructure and efficiency of Customs).
Access to Credit (Ease of Getting Credit and Cost of Credit).
Recommendations: the case for COVID-19 accelerated Start of Trade
There have been arguments for a postponement of the July Start of Trade due to the low level of readiness among member States and the ongoing health emergency. AfroChampions is however of the view that the very reasons being cited for a postponement – i.e., low level of readiness and the COVID-19 crisis – are actually the very reasons why the AfCFTA July Start of Trade should not be postponed.
First, low readiness is not a good reason to delay Start of Trade. Rather, Start of Trade is what is needed to improve readiness – because countries will only accelerate their readiness when trading takes off. Also, the race to the July Start of Trade is expected to inject some fresh momentum to coerce non-ratifying member States to swiftly submit their ratified documents to the AUC. As a gesture, the AUC should be accepting electronically ratified versions of the Agreement until the pandemic dies down for hard copy submissions. This can pull along all member States.
Second, COVID-19 is not a reason to delay Start of Trade. Rather, COVID-19 is a reason why we should accelerate Start of Trade. Indeed, we expect the level of readiness and commitment to be impacted by the COVID-19 crisis. Nevertheless, AfroChampions strongly advocates that in the face of COVID-19, Africa should use the AfCFTA to simultaneously play offensive and defensive by adjusting to current and critical issues needed to fight the pandemic. On the offensive, the July Start of Trade can focus on restricted trade in essential goods such as pharmaceuticals and food products to the fight against COVID-19. On the defensive, current border closure will continue as part of anti-COVID measures while at the same time permitting the entry of critical and life-saving goods.
The temptation to postpone is natural, given the health emergency and how it has disrupted preparedness and finalization of negotiations and operationalization. But as we have recommended in the Foreword, it is quite easy to use videoconferencing and online work platforms to keep AfCFTA negotiations and operationalization on track. Negotiators must adapt to the changing times. The new AfCFTA Secretariat must fully embrace and innovate for the crisis period into which it has been birthed. We urge African trade ministers and governments to make the tough, creative, bold choice to march on – despite COVID-19.