Challenges & opportunities in Africa's guided trade initiatives under AfCFTA

The Biashara Afrika Forum under the African Continental Free Trade Area (AfCFTA) recently concluded in Kigali, Rwanda, with a focus on advancing trade across Africa by addressing critical issues faced by small and medium-sized enterprises, women, and the youth. At the heart of the discussions was the need for inclusive growth to effectively tackle these challenges. CNBC Africa's Godfrey Mutizwa spoke to Wamkele Mene, Secretary-General of the AfCFTA Secretariat, to delve into the key areas of focus and the progress made towards enhancing trade among African nations. One of the key highlights of the forum was the Guided Trade Initiative, which aims at increasing inter-African trade through collaboration with trading companies. Mene highlighted the success of the initiative, which started in 2022 with seven countries and has now expanded to include 39 countries. The initiative has surpassed expectations by fostering value-added production and paving the way for commercially meaningful trade. The involvement of customs authorities, cooperatives, SMEs, and various ministries has been instrumental in driving the success of the pilot program. The focus on trade facilitation and shifting from revenue collection to promoting commerce has been a significant step in ensuring the seamless movement of goods across borders. Mene emphasized the importance of mobilizing customs authorities to understand their role in implementing the AfCFTA agreement and facilitating trade. He cited the example of Nigeria's Customs Authority, which has embraced the shift towards trade facilitation, leading to increased trade and domestic tax collection. Another critical issue discussed at the forum was the movement of people across borders in Africa. Mene acknowledged the challenges posed by visa requirements and emphasized the need to overcome security concerns to enable free movement of persons. He highlighted the success story of South Africa and Ghana eliminating visa requirements bilaterally, resulting in a significant increase in travel for medical tourism and business between the two countries. To address the issue of insecurity and improve border control, Mene proposed the establishment of a digital population register for the entire African continent. This innovative solution could provide immigration and security authorities with the necessary tools to track movement and enhance security measures. In line with capacitating the private sector, the AfCFTA Secretariat has identified four priority sectors—agriculture, pharmaceuticals, transport and logistics, and the automotive sector—that hold immense potential for intra-Africa trade. Mene stressed the importance of accelerating local production in these sectors to stimulate job creation and innovation. He highlighted the value proposition of $130 billion in investment opportunities presented by these four sectors within the AfCFTA framework. Additionally, Mene discussed the African Renaissance Retreat, a platform initiated by President Kagame and Chairman Dangote to address key challenges hindering Africa's economic development. The retreat brought together key stakeholders from the private sector, including commercial banks and private equity firms, to brainstorm solutions and mobilize investments in infrastructure and trade. Looking ahead, the focus is on implementing these solutions through collaboration between the public and private sectors at the highest level of the African continent. The upcoming roundtable dialogue between Heads of States and the private sector in February aims to chart a course of action for addressing critical challenges and driving sustainable growth across Africa.