By Joshua Yousouph
The Secretary General of the African Continental Free Trade Area (AfCFTA); Wamkele Mene has shed light on the hurdles that are obstructing the full implementation of the continental trade agreement highlighting challenges stemming from ratification delays, capacity disparities, and infrastructure deficiencies.
However, one of the most pressing impediments highlighted by the AfCFTA Secretary General revolves around Africa’s extensive infrastructure gaps. According to him, Africa faces an overwhelming annual financing need estimated between $130 billion and $170 billion, coupled with an alarming funding gap ranging from $68 billion to $108 billion.
Wamkele stressed that the deficit severely restricts Africa’s ability to establish robust connectivity which is crucial for efficient trade movements.
In an official magazine recently published by the AfCFTA Secretariat in Accra Ghana which was made available to our correspondent, Wamkele informed that the disparities among African nations in terms of economic development and industrial capacity, pose a significant challenge, even as he added that while some countries possess the readiness to leverage immediate benefits from the unified market, others lack due to inadequate industrial capabilities.
This disparity, according to Wamkele, extends to institutional capacity crucial for enforcing harmonized rules, with certain nations lacking readiness.
Specifically, he said the challenge of transporting goods from ports located in the southern regions to key agricultural hubs in the northern parts of countries in Africa has been a substantial impediment.
The AfCFTA Secretary General further noted that limited access to energy across most African countries stifles industrial transformation, while low digital penetration rates persist as a prominent challenge, complicating efforts to modernize trade-related services.
In his words: “The disparity between African countries and Institutional capacity poses a huge challenge because it goes to questions around inclusivity of benefits of the agreement. The 55 African Union member states are at different levels of economic development and industrial capacity. Close to 50 per cent of Africa’s cumulative GDP (2020) is, for example, contributed by only three countries.
“While some countries may be ready from an industrial capacity point of view to export straightway to derive immediate benefits from the one Africa market, some other countries will need more time. Furthermore, when it comes to enforcement capacity of the harmonized rules, countries are at different levels of readiness. Some of the countries currently lack capacity, however, they have ratified the agreement in the hope to develop their capacity as they implement the agreement.
“Africa remains constrained by huge infrastructure gaps, with an estimated annual financing need of between $130 billion and $170 billion, and an annual financing gap of between $68 billion and $108 billion. The lack of connectivity between fragmented economies and even within certain countries hinders the ability to transit trade from the bottom of the country where the port is situated to the top of the country where often a lot of agriculture is produced”, Wankele said.
Speaking on the complexities and technicalities of trade agreements, the Secretary-General emphasized the pivotal role played by the Protocols on Trade in Goods and Trade in Services, which entered into force on May 30, 2019, marking crucial building blocks for the envisioned one African market.
Highlighting the significance of these Protocols, the Wamkele asserted that they are fundamental for enabling free trade arrangements, essential for deeper integration. He said the subsequent Phase II Protocols on Competition Policy, Investment, IPR, and future Protocols aim to further bolster this integration.
While stressing that addressing these infrastructure gaps isn’t the core mandate of the AfCFTA Secretariat, the Secretary-General affirmed their commitment to collaborating with relevant African Union organs and Development Partners. He said this collaboration aims to prioritize and establish essential infrastructure networks vital for overcoming logistical barriers and fostering cost-effective trade across the continent.
“While this is not a core mandate of the AfCFTA Secretariat it impacts on trade in goods but also the delivery of services such as transport. The Secretariat, in this regard, would continue to work with the relevant African Union organs and Development Partners to establish priority infrastructure networks.
“As Secretariat, we appreciate the fact that trade agreements are very complex, very technical, and thus countries tend to take a lot of time to deliberate on the implications and obligations that they are undertaking.
“The Secretariat has continued to engage and provide the needed support, where necessary, to ensure that all the African Union Member States are on board in order to have the AfCFTA operating at full capacity to yield maximum benefits” Wamekele noted.