African states are facing custom delay periods due to visa issues, shortages of paved roads and loss of goods due to limited cold chains.
The umbrella bodies of the African Continental Free Trade Area (AfCFTA) private sector have called for the removal of visas and reduction of custom processes to ease movement of goods within the African continent.
The African Business Council (AfBC) that brings together regional economic communities (RECs) decried inconsistent and inadequate freight and logistics at the borders saying they have long hindered intra-African trade.
Speaking during the official opening of the AfCFTA Business Forum held last week at the Cape Town International Convention Center in South Africa, the AU Commission Deputy Chairperson Monique Nsanzabaganwa disclosed that so far, 47 member states had ratified the agreement but decried the existence of many non-tariff barriers to trade, especially transport logistics.
“A number of instruments have been put before you to start trading under the AfCFTA, and these include the AfCFTA e-Tariff Book, the Rules of Origin Manual, the African Business Council, the Pan-African Payments and Settlement System (Papss), and the AfCFTA Dispute Settlement Mechanism, among others. All these instruments and tools are designed to ensure that legitimate business transactions thrive,” said Dr Nsanzabaganwa.
“I am glad that 47 member states have ratified the Agreement, and this is a clarion call to the Customs Authorities to do the necessary,” she added.
African countries are facing high custom delay periods due to visa challenges, shortages of paved roads upon which freight can be transported and a higher loss of goods due to limited cold chains compared to other regions globally.
“This is an opportunity for our continent to leapfrog as we recover from the ravages of the Covid-19 pandemic and the geo-politics. It is equally an opportune moment to galvanize the continent from the extra-continent dynamics and start looking for home-grown solutions,” said Dr Nsanzabaganwa.
African states currently import $36.8 billion worth of freight or logistics goods, from passenger freight and transport to parcel and courier services, every year from within and outside the continent.
Under AfCFTA, that amount is set to swell and African companies can fulfil that demand but NTBs including delays in application of visas for people transporting the goods have hindered this growth.
“As we say, goods move with people. This idea of taking more than three days waiting for a visa application at the border is killing intra-trade. As members of the African Business Council, we want African countries to eliminate visa applications at the border and reduce the amount of time it takes to fill in custom paperwork,” said John Kalisa, the chief executive officer at the East African Business Council, a member of the ABC representing the East African Community (EAC).
“RECs have a critical responsibility in creating awareness of AfCFTA’s instruments to enable the business community to take advantage of the opportunities presented by AfCFTA,” Kalisa added.
A number of African countries have enacted visa application process rules that could take up to more than 72 hours for one to get a visa. EAC and SADC countries and ECOWAS are some of the regional blocks that have different visa rules thereby delaying the movement of people trading across the borders.
The World Economic Forum expects an increase in intra-African freight demand of 28 percent, translating to additional demand for almost two million trucks — used primarily for the expected growth in trade of automotive parts and pharmaceuticals — 100,000 rail wagons, 250 aircraft and more than 100 vessels by 2030.
Maritime trade is projected to increase from 58 million to 132 million tonnes by 2030 with the implementation of AfCFTA, and the growth in this sector will help, in particular, with a projected boom in agro-processing trade caused by AfCFTA.
“The projected increases can only be a reality should the regional blocks eliminate visa delays at the border,” said Kalisa.