By Martha Agas, News Agency of Nigeria (NAN)
The African Continental Free Trade Area (AfCFTA) was unveiled in 2021 with the goal of increasing intra-African trade by reducing tariffs and eliminating other trade barriers.
The AfCFTA initiative marks a significant stride in fostering greater economic integration across African nations.
According to the World Bank, AfCFTA has the potential to boost Africa’s exports by 560 billion dollars primarily in the manufacturing sector and raise the continent’s income by 450 billion dollars by 2035.
It also aims to enhance Africa’s global trading position while driving industrialisation by eliminating 97 per cent of tariff lines on goods and services.
Prior to the unveiling of the AfCFTA, analysts argued that intra-African trade was significantly lower than that of other regions due to persistent structural and policy-related challenges.
Between 2015 and 2017, intra-African trade accounted for only 15.2 per cent of the continent’s total trade, compared to 68.1 per cent in Europe, 59.4 per cent in Asia, and 55 per cent in North America.
Trade reports reveal only marginal improvement between 2022 and 2023, with intra-African trade accounting for 14 to 18 per cent of total trade, while in comparison, Europe maintains 60 to 80 per cent, Asia 58 to 60 per cent, and North America around 40 per cent
Also, the African Export-Import Bank (Afreximbank) reported a 7.2 per cent growth in intra-African trade in 2023 with Southern Africa leading with 41.4 per cent, followed by West Africa with 25.7 per cent, East Africa, 14.1 per cent; North Africa, 12.4 per cent; and Central Africa 6.6 per cent.
To some stakeholders, this data shows modest progress, while others argue that the change is not yet substantial.
Experts note that Africa still lags behind its global counterparts due to high trade costs, inefficient border procedures, and inadequate infrastructure factors that hinder the full realisation of AfCFTA’s benefits.
To address these challenges, customs leaders, development partners, and technical experts committed to advancing customs modernisation across the West and Central Africa (WCA) region recently gathered in Nigeria for the fourth World Customs Organisation (WCO) Donors’ Conference for the WCA Region to discuss issues affecting intra-regional trade.
The conference, themed “Partner Mobilisation around the Priority Projects of the WCO’s WCA Region: A Genuine Pledge to Meet the Modernisation Goals and Performance Targets of Member Customs Administrations’’ represents a collective effort to transform customs operations, particularly through trade modernisation.
The theme, according to the Comptroller -General (C-G) of the Nigeria Customs Service (NCS), Adewale Adeniyi, reflects a shared commitment to transforming customs operations through targeted technical interventions supported by development partners.
Adeniyi said that customs administrations across the WCA region were grappling with several technical challenges that were impeding effective trade facilitation and revenue collection.
He said inadequate digital infrastructure was on the challenges, which was affecting seamless processing of declarations and risk management, while limited interconnectivity between national customs systems was obstructing effective information exchange.
He further explained that insufficient technical capacity to implement advanced customs procedures, such as post-clearance audits and Authorised Economic Operator (AEO) programmes, also remained a significant hurdle for the region.
“We (WCA) have challenges in effectively implementing technical aspects of the AfCFTA Rules of Origin and other trade facilitation instruments,’’ he said.
According to him, fragile borders, technical barriers to coordinated border management, and the rapid growth of e-commerce are further complicating customs operations which can be addressed with the right technical support and partnerships.
Based on the Nigeria Customs Service’s experience and a regional needs assessment conducted by the World Customs Organisation (WCO), Adeniyi outlined five key priority areas requiring donor support in the WCA.
The first is regional interconnectivity, which involves establishing infrastructure for real-time information exchange between customs administrations, using the Nigeria–Benin Republic model as a pilot.
The second priority is the development of a competency-based human resources system, by implementing the WCO framework to build technical capacity among customs officers.
Third, Adeniyi emphasised the need for technology-driven illicit trade detection, specifically through the deployment of AI-powered scanners and forensic tools to combat smuggling and other illicit activities.
The fourth priority focuses on supporting the implementation of the AfCFTA by building technical capacity to enforce preferential rules of origin and verification procedures.
Lastly, he highlighted the importance of regional single window integration, aiming to create interoperable national single window systems for seamless customs operations across the region.
Speaking at the event, Mr Wale Edun, the Minister of Finance and Coordinating Minister of the Economy, said that the WCA region represented a market of more than 450 million people, with a combined GDP exceeding 900 billion dollars.
Edun said that in spite of the aforementioned, intra-regional trade accounted for just about 12 per cent of the region’s total trade volume, compared to 60 per cent in Europe and 40 per cent in East Asia.
Highlighting the region’s potential, Edun said it housed eight of the world’s 32 landlocked developing countries, which faced average import costs nearly twice those of coastal nations.
“Customs processing times across our borders average 12 days, significantly above the global best practice of less than 24 hours; these statistics highlight both our challenges and our enormous untapped potential.
“Suffice it is to say that modernising and harmonising our customs procedures, we could boost intra-regional trade by an estimated 50 billion dollars annually, create millions of jobs, and significantly reduce poverty across our communities,’’ he said.
However, the minister noted that emerging external challenges such as the imposition of reciprocal tariffs by the U.S. and the significant reduction in foreign assistance through USAID had direct implications for the region.
According to him, eight countries across West and Central Africa including Nigeria, Cameroon, and Côte d’Ivoire have been affected by these measures, with an average tariff of approximately 13.83 per cent now imposed on exports to the U.S.
Such actions, he observed, not only increased the cost of exports but also undermined efforts to boost trade competitiveness and diversify economies across the region.
Edun said that the abrupt withdrawal of development aid in health and education further compounded economic difficulties and underscored the urgency of accelerating AfCFTA implementation, boosting domestic revenue, and investing in resilient trade systems.
Echoing this sentiment, in a recent news conference, the President of the Lagos Chamber of Commerce and Industry (LCCI), Mr Gabriel Idahosa, said intra-African trade under AfCFTA should be aggressively promoted in response to the Trump-era tariff policies.
Analysts say this development highlights the need for Africa to deepen intra-African trade through AfCFTA and leverage frameworks such as the Pan-African Payment and Settlement System (PAPSS) to reduce trade costs and foster regional integration.
Experts and global institutions emphasise that for intra-African trade to thrive, trade policies must be harmonised and barriers significantly reduced.
For example, the World Bank underscores the importance of streamlined customs and lower tariffs, noting that digitised customs procedures can reduce border clearance times by up to 20 per cent.
Also, a customs expert, Dr Eugene Nweke, also called for the harmonisation and simplification of customs procedures in West and Central Africa (WCA) to boost regional trade, emphasising that it could be achieved through digitalisation, greater transparency, and consistent enforcement of regulations.
Nweke, who is also the Secretary of the Customs Consultative Committee (CCC), said customs administrations played a critical role in enhancing regional trade by reducing costs, increasing efficiency, and promoting economic integration.
He called for cross-border collaboration among customs administrations, the enforcement of anti-corruption measures, and targeted support for Small and Medium Enterprises (SMEs), which often struggled with complex customs procedures and trade agreements such as the AfCFTA.
The expert urged the customs administrations to collaborate in sharing best practices, coordinating policies, and addressing common challenges.
“Customs administrations should also develop and implement regional strategic plans that align with continental frameworks like the AfCFTA to promote intra-African trade,” he suggested.
Ultimately, customs administrators and stakeholders agreed that boosting intra-regional trade in West and Central Africa requires comprehensive policy reforms, infrastructure upgrades, financial support, and a robust private sector.
They say WCO-WCA donors’ conference is a significant step towards mobilising resources and partnerships to bridge the gaps and realise Africa’s trade potential.
NANFeatures