African business leaders chafe at obstacles to trade

ABIDJAN - More than four years ago, African countries gave the ceremonial push to a deal to scrap internal trade barriers -- a historic scheme that would create a continent-wide single market worth trillions of dollars.

But African business leaders say cross-border trade remains entangled in customs duties, administrative hurdles and varying national regulations.

Costs and delays are hampering African corporations fighting to compete with low-cost rivals, they say.

The African Continental Free Trade Area (AfCFTA) was signed in 2019 by 54 out of the African Union (AU)'s 55 states, who together accounted for GDP last year of $3-trillion.

It formally began operations on 1 January 2021 with the goal of achieving 90 percent cuts in tariffs within five to 10 years.

The International Monetary Fund (IMF) says this would unlock a real increase of 10 percent in per-capita GDP and a 50 percent rise in intra-African commerce.

But AfCFTA faces an uphill task.

Its secretary-general, South African trade expert Wamkele Mene, told the Africa CEO Forum that "fragmentation" in the continent's market had worsened in the past decades.

"Every African activity has been negatively impacted by this fragmentation," he said. 

The problems are having an impact on African companies competing with developing-country counterparts facing lower or even zero hurdles.

Around 350 African companies today have a turnover of more than a billion dollars, a fall of six percent since 2015, compared to 210 in Latin America and 170 in India, tallies that have risen by almost a third over the same period.