Magazine article African Business

Making the Case for Trade: As Global Trade Tensions Mount, the World Economic Forum Is Pursuing a Range of Practical Initiatives to Boost Trade in Africa

Magazine article African Business

Making the Case for Trade: As Global Trade Tensions Mount, the World Economic Forum Is Pursuing a Range of Practical Initiatives to Boost Trade in Africa

Article excerpt

After years of wrangling, the outlook for trade in Africa received a major fillip in March 2018 with the signing of the African Continental Free Trade Agreement (AfCFTA), an ambitious plan that aims to expand regional trade by 54% through removing tariffs on 90% of goods traded across the continent. The agreement was further strengthened in July 2019 when Nigeria, the continent's largest economy and one of the last major holdouts, finally agreed to join.

On a continent long used to the inconveniences of border delays and overly officious customs staff, the signing of the AfCFTA has been greeted as a major sign that the continent is ready to embrace a future of free trade and more flexible borders, in contrast to the broader trade tensions on display elsewhere in the world.

Sean Doherty, head of trade and investment at the World Economic Forum, says the agreement is useful for catalysing political and business support around an often-controversial topic.

"Leaders have limited numbers of hours so they want to focus on things that are moving forwards. In big multinational trade deals there's value in the text but a fair amount comes from it being a focusing device--people say, this is important and let's make sure it happens. It focuses attention on what needs to be done. The CFTA is quite a big deal, there's still quite a long way to go in terms of it having a concrete impact, but it's definitely positive in getting to a deal." For the World Economic Forum, the pro-trade sentiment expressed in the deal offers a useful backdrop as it pursues a range of nuts-and-bolts initiatives to boost trade in Africa and beyond. As well as encouraging broader dialogue around trade issues, Doherty's team works on policy recommendations and the implementation of specific initiatives where consensus can be found.

The hard slog of technical work may be less glamorous than the signing of major agreements, but is often crucial to sustaining their wider impact. One such area is trade facilitation--in short, making it easier for countries to allow goods to cross borders and get through customs.

"With a number of partners we set up the Global Alliance for Trade Facilitation, and this supports countries in making trade facilitation reforms. It's reasonably active in Africa--we have projects ongoing in Kenya, Ghana, Morocco, Nigeria and Zambia. In Zambia they are looking at customs broker licensing systems and trying to make things easier so that companies have an easier time working with customs brokers and it [all] becomes less bureaucratic. In Ghana and Kenya it's more to do with advanced rulings for customs, so you know how much you're going to pay before goods arrive rather than waiting."

Other initiatives focus on allowing customs to predict the likely cargoes of long-term importers and exporters, saving time on unnecessary inspections and speeding up traffic-choked border posts. Investment facilitation is also a key part of WEF's work on the continent, allowing would-be investors to connect easily with target companies and the wider ecosystem of subcontractors and support businesses.

"In Ghana we're looking at what it can do to make sure it's both easier for outsiders to invest and to help the chances of that investment being sustainable, with knock-on effects in terms of jobs and environmental spinoffs. …

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