Over 50% of CEOs surveyed about the impact of the African Continental Free Trade Area (AfCFTA) do not know where to access useful information on the project, according to a new survey.
The 2022 CEO Trade Survey Report by PAFTRAC, in association with African Business, Afreximbank and other partners, surveyed over 800 private sector players between March and June 2022. It found that there was significant optimism that the AfCFTA will revitalise Africa trade but significant demand for information on how the project will work.
Without the right information, positive legislative moves could be stymied by hesitancy on the ground, leading to confusion in border posts and boardrooms, the authors write.
“While free trade has the potential to greatly boost trade volumes between African countries, it is vital that the AfCFTA is actually implemented, that the rules are clear and widely understood, and that African businesses are easily able to access the various rules and regulations when required. The lack of freely available information makes it more difficult for the agreement to be effectively implemented. Even when specific regulations surrounding the AfCFTA are made more readily accessible, it is important that the information is kept up to date.”
One-stop shops will benefit SMEs
Fifty-nine percent of CEOs surveyed called for a designated in-country office for information, while 70% called for a fully functioning online one-stop shop for information. Sixty-seven percent called for workshop and information sessions, while 71% called for the availability of more trade information and market opportunities.
Making trade information and market opportunities available as well as establishing fully functioning one-stop shops at border posts and online are some of the recommendations made by PAFTRAC for how to enable businesses – particularly small and medium enterprises – to benefit from the new arrangements.
“With SMEs dominating Africa’s trading landscape it is imperative to avail trade information and market opportunities as well as trade facilitation services. Fully functioning one-stop shops for traders will enable businesses, particularly SMEs, to benefit from AfCFTA.”
Plans to improve information flow
Speaking on a webinar to discuss the findings of the report, Cynthia Gnassingbe-Essonam, senior advisor at the office of the secretary-general at the AfCFTA Secretariat, said that plans are in the works to improve the information flow to businesses.
“We are very aware of this shortfall if we can call it so, but I would like to say the AfCFTA Secretariat is two years old and has been operationalised in the middle of Covid so it does take time, and when you look at the progress and the achievement that has happened in terms of the negotiation of the protocols and achieving the rules of origin, there is a balance. A lot has happened but now it’s time we need to communicate and engage with our stakeholders, mainly the private sector, civil society, academia, for everyone to own the AfCFTA – which is our baby on the continent – and to make it work. Internally we are working on a private sector engagement strategy and the overall objective is to develop a pragmatic approach to mobilise private sector support and participation in the implementation process, and to activate its role as the key driver of intra-African trade.”
Plans include developing a thorough understanding of the AfCFTA among the business community, including SME education, skills development and targeted support, said Gnassingbe-Essonam.
Such programmes would build on significant optimism among CEOs for the free trade area unearthed by the survey. Ninety-three percent of respondents are at least somewhat confident that the AfCFTA will boost intra-African trade, over 60% believe the free trade area will have a significant positive impact on their businesses, and 100% believe it will boost manufacturing.
That augurs well for the future of the scheme given that 40% of CEOs surveyed represented companies that have been in operation for less than five years.
To access the full survey click here