Policy makers and private sector experts have tipped African governments to press on with reforms to remove hindrances such as high tariffs, too many roadblocks and excessive multiple bonds for transit goods that affect trade in Africa.
Most African countries face considerable challenges to achieving a more open trade. One reason is that the costs of trading remain high preventing potential African exporters competing on global and even on regional markets. Realising this trend, policy makers have started paying more attention to addressing trade-discouraging non-tariff barriers.
Even more, small-scale traders are often ignored in decision-making process. That is why the figure for intra-Africa trade is misleading as noted by UN economic commission executive secretary Carlos Lopes “because it takes no account of the informal trade that occurs between African countries and which can be witnessed on a daily basis at almost every border.â€
Small-scale traders want their voices heard and their problems given the much deserved attention, said Augustine Tawanda, chief executive officer of the Zimbabwe Cross Border Association in his presentation on ‘Managing Transit and Mobility Across the Borders’.
“Small-scale traders face a number of challenges, including lack of information technology infrastructure that can facilitate e-commerce so that a business woman does not have to carry lots of cash when travelling to buy her merchandise for sale,†said Tawanda.
He argued that better trade facilitation could maximise micro-small and medium enterprises capacity and performance.
“Customs mordernisation, improvements in infrastructure, elimination of non-tariff barriers and public private partnership of manning customs points are some solutions we believe could improve intra-African trade,†he argued.
Dr Stephen Karingi, director of regional integration, infrastructure and trade at United Nations Commission for Africa (Uneca), says in spite of liberal trade regimes and a host of trade preferences to developed markets, Africa’s trade still accounts for about three percent.
Karingi told participants at the just ended Africa Trade Forum held from 24-26 September on the theme: Boosting intra-African trade and establishing the continental free trade area, that simplifying trade relationships in areas such as clearance times at ports can greatly facilitate trade and bring about economic dividends.
Referencing studies by the OECD, he noted that improvement of coordination among border agencies and reducing clearances times could reduce trade costs by about 2.4 percent.
“The solution that comes to mind is to establish the now familiar One Stop Border Posts (OSBPs), such as the one in Chirundu, at the border of Zambia and Zimbabwe,†said Karingi, adding that such best practices could be scaled up.
“A related best practice is the improvement of information, providing advance rulings on tariff classification and applicable duties which combined have been estimated to reduce the trade costs by at least 5.5 percent,†stressed Karingi. He added that the establishment of National Single Windows (NSWs), which are meant to reduce documentation, “could also provide the avenue to enhance information flow and advance decisions.â€
He also said a framework for networking these NSW initiatives could go a long way towards boosting intra-African trade. “If two or more of these NSWs are to speak to one another, there is need for coordination,†he emphasised.
Acknowledging that measures, including road transit facilitation instruments have been put in place to promote the free flow of goods, Karingi noted that stakeholders such as truck drivers, transporters and shippers continue to face difficulties along African trade and transit corridors.
“If we are to move from talk to action, we must get practical solutions that will make the efforts that we are currently undertaking to work,†he urged. For instance, streamlining fees could cut 1.7 percent of total costs.
“Any business person or trader will tell you that a 10 percent reduction on trading costs means a lot to the bottom-line and the competitive margin,†he said.
The series of Assessing Regional Integration in Africa reports published jointly by the ECA, African Development and the African Union Commission have articulated the range of challenges in this regard.
They point out that the average time required for customs clearance for a sea cargo in Africa is 10.1 days, compared with 2.1 days in OECD countries; and only 30 percent of the African road network is paved.
Further, each day of delay at customs is estimated to be the equivalent of adding 85 kilometres between a country and its trading partner. And, the number of road blocks in some countries can be as numerous as 1 for every 10 kilometres.
