AfCFTA will have positive effect on intra-African trade

18 Jun, 2022 - 21:06 0 Views
AfCFTA will have positive effect on intra-African trade

eBusiness Weekly

Kudzanai Sharara in Cairo Egypt

The vast majority of African CEOs believe that the African Continental Free Trade Area (AfCFTA) will have a positive impact on both levels of intra-African trade and on their own companies.

This is according to the Africa CEO Trade Survey that was launched on June 17, 2022, during the Afreximbank Annual Meetings, which were being held in the New Administrative Capital of Egypt.

This year, over 800 executives active in the continent, from 46 countries in Africa, responded to the Survey which provided a unique insight into the challenges and opportunities that exist in trading in Africa, and served as an excellent barometer of private sector sentiment on African trade and the AfCFTA.

The survey, which was conducted by the Pan-African Private Sector Trade and Investment Committee (PAFTRAC), revealed that 93 percent of CEOs surveyed were confident to some extent that it would have a positive impact, with 26 percent describing themselves as very confident.

According to the Survey Report, the AfCFTA is widely expected to help businesses open up new markets for goods and services, while reducing the cost and bureaucracy attached to exports.

However, respondents to the survey also highlighted areas that might hinder the full potential of AfCFTA.

Part of the Survey Report read: “For instance, the transport infrastructure required to trade goods between African states is lacking in most areas.

“Rail and road networks were developed on a national basis, with far too few cross-border links on which to carry freight. There are often too few customs  posts, while many of those that do exist are slow and cumbersome.

Futher,regulations often demand that the same cargo is checked on each side of a border, while some countries have been slow to adopt digital bills of lading, letters of credit and other trade documents.

“Regulatory changes come down to a matter of political will and administrative competence but upgrading transport infrastructure requires financing that will be difficult to secure,” reads part of the Survey Report.

Speaking on the survey results, Prof Pat Utomi, Chairman of PAFTRAC, shared that the “survey clearly shows that the vast majority of African CEOs believe that the implementation of the AfCFTA will have a positive effect on levels of intra-African trade, even as early as 2022-23.

Just 4 percent of participants believe that the AfCFTA will have, or has already had, a negative impact on their businesses.

While intra-African trade and the AfCFTA plays a big part in the report, the Survey also highlighted how African businesses see opportunities in external markets.

Prof Utomi explained that “African companies do not seem to greatly favour exporting to any one region of the world over another.

However, the survey showed while Europe appears to the be the favoured export destination, the Middle East is an increasingly popular destination given growing trade and investment ties with Africa.”

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