AU to develop monitoring mechanism to ensure barriers to trade are eliminated

African Union Summit
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The African Union (AU) is developing a monitoring mechanism to ensure that barriers to trade are eliminated.

It wants to ensure that the African Continental Free Trade Area, set to be launched by July 2020, progresses faster.

Intra Africa trade is among the main agenda points at the African Union Summit set for February 9 and 10.

According to the United Nations Economic Commission for Africa, the new intra Africa Trade area targeting a market of 1.3 billion people of the continent commits countries to remove tariffs on 90% of goods.

It’s designed to progressively liberalize trade in services, and address other non-tariff barriers, like long delays at national borders which hamper business links between African countries.

Commissioner for Trade and Industry Albert M. Muchanga says: “If for example, we have somebody based in Lesotho wanting to sell jewellery in Morocco, he has to do a number of connections before they reach and the cost is quite high. So through the single African air transport market, we are creating an environment of open skies for Africa to reduce the cost of flying and increase connectivity.”

Different tax regimes in countries are a challenge but beyond that are other hurdles.

With the assistance of the African Export-Import Bank the African Union is designing an online mechanism to monitor trade and use that data to improve the business environment.

Muchanga says: “We are going to start with a pilot phase in West Africa and trade information is also very key and to this end, we are developing the Africa trade observatory, and one of the key elements there is to give information on opportunities for exports and imports across the markets.”

The continental body is looking at the private sector to lead the expanded intra Africa trade, but it says not everybody believes in the initiative.

“They see the African Union as a political institution. And when we tell them about the opportunities that we are creating, in the African continental free trade area, some of the operators on the ground do not believe that it is possible. They think that it is one of the agreements agreed upon by the heads of state and never implemented.”

Watch 2019 discussions on Free Trade Agreement opportunities: