Building capacity to help Africa trade better

Trade facilitation and industrialisation: Cross-border value chain development – Progress to date and way forward

Trade Briefs

Trade facilitation and industrialisation: Cross-border value chain development – Progress to date and way forward

Trade facilitation and industrialisation: Cross-border value chain development – Progress to date and way forward

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Objectives of the African Continental Free Trade Area (AfCFTA), such as industrial development through diversification and regional value chain development, increased intra-regional trade, economic growth and jobs for African’s young population, cannot be achieved unless Africa improves its transport and trade facilitation (TTF). TTF entails implementation of measures to harmonise, streamline and simplify the technical and legal procedures for products entering or leaving a country to be traded regionally and internationally. It includes the full spectrum of border procedures, from the electronic exchange of data about a shipment, to the simplification and harmonisation of transport and trade documents flow to lower overall transport and trade costs and increase economic welfare of our people.

Currently road transport, which conveys 80% to 90% of goods on the continent, is the most costly in the world due to the bureaucratic impediments related to the requirements for different permits based on bilateral agreements and a multitude of different statutory requirements and documents from country to country. Long delays at ports, border posts, weighbridges and check points add to cost as journey time exceeds twice the possible travel time. To address these challenges, the African Union Commission (AUC) and its Regional Economic Communities (RECs) such as SADC, COMESA, and EAC have adopted the transport corridor concept as the planning framework for improving trade and transport facilitation to remove some of the key non-tariff barriers to trade. This Trade Brief discusses TTF in Africa and the need to develop its transport corridors into SMART corridors to facilitate realisation of the objectives of the AfCFTA.

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