The African Continental Free Trade Area is an ambitious trade pact to form the world’s largest free trade area by creating a single market for goods and services of almost 1.3bn people across Africa and deepening the economic integration of Africa. The trade area could have a combined gross domestic product of around $3.4 trillion, but achieving its full potential depends on significant policy reforms and trade facilitation measures across African signatory nations.
The AfCFTA aims to reduce tariffs among members and covers policy areas such as trade facilitation and services, as well as regulatory measures such as sanitary standards and technical barriers to trade.
The agreement was brokered by the African Union (AU) and was signed by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018. The only country still not to sign the agreement is Eritrea, which has a largely closed economy.
What does a successful implementation of AfCFTA look like?
Picture an exporter in Akim Oda in the Eastern Region of Ghana, who exports tubers of yam to Northern Africa. As her cargo is Tunis bound, she must cross over the Mediterranean into Europe to wait long transit hours to catch a flight back into Africa to meet her goods, and while at that, she worries about entry visas and permits every step of the way.
She exports yam tubers because she has no means of processing it into semi-finished and finished products which are in high demand in Southern Africa, and she also does not have the means to know about this high demand.
With all that headache, she exports all together less than a 20-footer container all year because if she took a loan from the bank, with her risk standing so tall, high interest rates brings everything back where she started or even worse.
The bureaucracies at ports, transportation means and costs, police checkpoints, duplicated regulations, warehousing challenges, and so many others all add to her frustration. And she probably gives up.
The African Continental Free Trade Area, the largest since the formation of the World Trade Organisation, if properly implemented, will resolve for our exporters, issues of trade finance and productive capacity, trade facilitation and trade related infrastructure, free movement of goods and persons, and very importantly, trade information.
It will make Africa one giant market for traders and exporters, provide an inevitable basis for value addition through the rules of origin and hence a boost in intra – African trade through better harmonisation and coordination. It will engender economic diversification and industrialisation through regional value chains, provide jobs for Africa’s youth and improve the standard of living of all our people. It is arguably the biggest stimulus yet for an industrialised Africa.
Today, by the power of digital technology, no one should be left out of anything, and not the opportunities of continental trade. Selling a service to customers in Kigali or Yaoundé or Rabat, if it was before a nightmare, it is now only a button’s click away. We must take advantage of the array of digital tools and electronic platforms available to us, to deepen our trade in goods and services across the continent.
The AfCFTA Hub Initiative/partners
The AfCFTA Hub initiative brings together the AfCFTA Secretariat and strategic partners like AfroChampions working hand in hand with committed governments to create a network for accelerating the kinds of regional integration that will really drive the kind of trade that can deliver economic transformation. Countries like Ghana and the six others participating in the Guided Trade pilot to fast-track AfCFTA implementation can then interlink their own systems with the AfCFTA Hub. Coupled with connections to major private sector platforms in the e-commerce, modern retail and logistics sectors, such interlinkages should create a powerful nerve center to facilitate and energise small and medium enterprises and startups into becoming the fuel for propelling AfCFTA implementation and Africas economic transformation forward.
As a multistakeholder platform bringing together the AfCFTA Secretariat, relevant African Union Commission departments, national government agencies, AfroChampions and private sector platforms through the power and ingenuity of digital technology, the AfCFTA Hub is the principal tool for aligning Ghana’s own wide-ranging digitalization policy with the various opportunities presented by AfCFTA.
The Ministry of Communications & Digitalisation, Ministry of Finance and the Ministry and Trade & Industry, together with their departments and allied agencies and institutions, are happy to present the AfCFTA Hub policy directives, implementation strategies and operational models for inputs from all relevant stakeholders. But before we delve into that critical task, we need to establish clearly the country’s overall framework for embedding its digital strategy into this exciting AfCFTA opportunity.
STRATEGIES THAT UNDERPIN THE SUCCESS OF AfCFTA
First and foremost, Ghana as a continental leader in ICT innovation and adoption, sees it as an opportunity to export our ICT goods and services across Africa and beyond, and some of those prospects have already materialized. AfCFTA Hub should make it easier for technology startups and other producers of ICT goods and services to find markets across Africa. Our business process outsourcing landscape can be revitalized by AfCFTA as Ghana becomes a hub for call center, data processing, data science and various digital services for businesses all over the continent and beyond.
Secondly, it is imperative to use digital technology to bolster the competitiveness of all sectors of the economy to enable economic actors in those sectors to expand their markets through AfCFTA. Enhanced productivity through the adoption of tools that can be made available through the AfCFTA Hub platform represents a seismic shift from costly time ineffective traditional capacity building approaches to a new cloud-based model whose time has truly come. The role that the AfCFTA hub can play in aggregating content and tools to capacitate businesses across the country to upgrade their know-how to engage more forcefully in export markets beyond Ghana is limited only by our imagination.
Thirdly, the mechanisms of how we harness AfCFTA itself: the process of trading, financing trade, discovering our market strengths and gaps to fill’ the means of settlement, how the goods will leave our warehouses and be received on the other side; and the tools for linking our producers with consumers in other African countries and vice versa, all of these are being digitised and made available to all stakeholders through the AfCFTA Hub. Risk management is also key and the related proper seals platform, currently being deployed by the FDA, plays a critical role.
These three strategies underpin Ghana’s quest to make AfCFTA work for us by leveraging our strong advantage in the digital technologies that our government has been systematically developing for five years now.
It is the reality of a comprehensive end-to-end identity management system interlinked with credit management, human security, business facilitation, enhanced government administration and even the improvement of democracy itself. It is the reality of a new smart working environment across the public services enabled by productivity software and dramatically improved connectivity. It is the reality of the common platform, Ghana Card, SIM Card Registration, Smart Workplace, e-Transform, Obaatanpa, Trancop, digital addressing, fintechs and the revamp of the national fibreoptic network.
With the AfCFTA Hub operationalised, it will become even harder to ignore the massive transformation created by Nana Addo Dankwa Akufo-Addo’s unprecedented Digital Ghana Agenda. An agenda that when coupled with the big dreams of Pan-Africanism, as finally achieved through AfCFTA, can only launch this beloved country of ours and the entire continent into the dizzying heights of true development. This will give practical effect to our oft repeated phrase that the private sector is the engine of growth as it will propel our SMEs to another level
As the accelerated AfCFTA Guided Trade Initiative commences in pilot form with Ghana and six other proactive African countries taking charge, we shall commence onboarding young entrepreneurs, Small and Medium Enterprises (SMEs), startups and all digital marketplace actors across the country onto the AfCFTA Hub, where they can obtain a free AfCFTA Number.
The AfCFTA Number is the powerful seed of a single continental trust-building system that will complement other AfCFTA-enabling instruments such as the PAPSS, MANSA, Digital Green Corridor and e-Tariff mechanisms developed by the AfCFTA Secretariat, African Union, the 4D Consortium and trusted partners like Afreximbank and AfroChampions. With the AfCFTA number, Ghanaian enterprises will obtain a sure and secure navigational tool as well as a trusted profile to speed up connections across the continent for business.
THE AfCFTA TRANSACTION ID
Together with the AfCFTA Common Transaction ID, the AfCFTA Number will also serve critical anti-fraud and crime-fighting purposes domestically and regionally. It will build confidence in both the entities and individuals who use their services locally and internationally that they have the requisite capability to deliver on their promised services as they would have been properly vetted and certified by the requisite regulators. It will create a true one stop shop akin to our own Amazon, EBay or Alibaba. It is doable and Ghana, the African Black Star, is blazing the trail once again.
For these and many other reasons, we are announcing directives meant to speed up the adoption of the AfCFTA Number and the AfCFTA Common Transaction ID frameworks in Ghana. Beginning immediately, all persons and enterprises engaged in the business of courier, postal, delivery, logistics, ride-sharing, e-commerce, digital trading and any enterprise of that nature are required to obtain an AfCFTA Number at no cost at www.afcfta.app, which is the AfCFTA Hub Gateway.
The regulation of such enterprises which hitherto has been a grey area will be strengthened by requiring electronic registration with Postal and Courier Services Regulatory Commission, the National Information Technology Agency (NITA) and the Cybersecurity Authority through the digital interface available on the AfCFTA Hub at www.afcfta.app. The various regulatory functions of reporting, complaints management, penalties and fine management, licensing, certification and the like shall be conducted electronically on this platform. As more African countries onboard, as part of the upcoming Guided Trade pilot, the emergence of a one-stop-shop for regulatory compliance across the subregion should make the lives of entrepreneurs and their customers very easy. All one needs to do to find out if any courier company, SME or e commerce entity is safe to do business with is to check their AfCFTA Number and transaction ID.
With the AfCFTA Number widely adopted and regulatory certification taking place on a unified platform, the process of validating the background of any commercial entity should become highly automated, quick, and hassle-free. It will also enable the different digital marketplaces, platforms, networks and e-commerce systems to collaborate and deliver even higher value for all Ghanaians and citizens of AfCFTA member states.
Because the AfCFTA Hub is also being rolled out in other markets, businesses would find that the benefits of an AfCFTA Number and the AfCFTA Common Transaction Framework extends well beyond Ghana.
The telecom industry should benefit from the related policy of deploying the AfCFTA Hub as a common fraud reporting node and blacklist database harmoniser because of this regional element. Without regional solutions, criminals will exploit the gaps among countries to evade apprehension. The NCA, the Ghana Chamber of Telecoms, the Ghana ISP Association and related bodies are strongly urged to speed up the rollout of the AfCFTA Hub across all telecom networks as a common anti-fraud engine, business directory service and AfCFTA Implementation Accelerator. This should make it more difficult for fraudsters to use online sales and mobile money payments for online transactions to defraud the unsuspecting public as more trade moves online.
The rollout of the AfCFTA Hub to ensure that Ghanaian businesses have a trusted profile beyond Ghana, to strengthen the hands of industry and regulators to fight fraudsters who would also like to use AfCFTA to regionalise their nefarious activities, and to facilitate marketplace convergence and regulatory efficiency, thereby accelerating the integration agenda of AfCFTA, is an idea long overdue but one that is finally here.
By Naa Korkoi Essah, Head, Public Relations, Ministry of Communications and Digitization (Ghana)