IMPLEMENTATION OF THE AfCFTA :ON DIGITAL TRADE AND FOURTH INDUSTRIAL REVOLUTION

PRESENTATION

BY

BALNESS SUMANI

10TH WEBINAR ON THE AFRICAN CONTINENTAL FREE TRADE AREA

10TH JUNE 2021

Presentation Outline

2

1. Introduction

2. COMESA participation in the AfCFTA Framework

3. Digital Trade

4. Fourth Industrial Revolution

2. Way forward and Conclusion

Introduction

3

❑ The 18th Ordinary Session of the Assembly of Heads of State and

Government of the African Union, in 2012, adopted a decision to

establish a Continental Free Trade Area by an indicative date of 2017

❑ The Continental FTA (AfCFTA) is the largest Free Trade Area in the

world in terms of participating countries since the formation of the

World Trade Organization.

❑ The AfCFTA brings together 55 AU Member States with a total

population of about 1.2 Billion and a combined GDP of about US$ 3.4

Trillion

❑ The Agreement entered into force on 30 May 2019 for the 24 countries

that had deposited their instruments of ratification by that date

❑ Trading under the AfCFTA Agreement commenced on 1st January

2021.

4

COMESA participation in the AfCFTA

Framework

COMESA participation in the AfCFTA Framework

5

❑ COMESA is regional economic community comprising 21 African

Member States. COMESA’s current strategy can thus be summed up in

the phrase “economic prosperity through regional integration.”

❑ COMESA participates at two levels in the AfCFTA Framework, namely, at

REC and Member State levels,

❑ The African Union (AU) recognized that RECs played a big role in the

development and negotiations of various instruments for the AfCFTA

through the establishment of a Continental Task Force comprising

experts from the eight RECs that are recognized by the AU to assist in

the development of various AfCFTA instruments and participation in the

negotiation processes,

❑ Legal and policy instruments developed under the COMESA, EAC and

SADC Tripartite were used to fast-track the development and negotiation

of similar instruments under the AfCFTA.

6

Digital Trade

Digital Trade

7

NTBs online reporting, monitoring and elimination mechanism

❑ COMESA-EAC-SADC online NTB reporting, monitoring and elimination

system; www.tradebarriers.org

❑ AfCFTA online NTBs reporting, monitoring and elimination mechanism

https://tradebarriers.africa/

❑ web-based NTBs reporting, monitoring and eliminating mechanism is

accessible to economic operators, government functionaries, academic

researchers and other interested parties.

❑ Interested parties directly report complaints online which are sent

directly to formally nominated government officials (National Focal Points)

❑ National focal points and RECs focal points work in collaboration in

resolving reported complaints in a timely manner

Digital Trade

8

❑ To date 728 reported complaints through the COMESA-EAC-SADC

online reporting system were resolved

❑ In 2019, COMESA piloted in Malawi, Zambia and Zimbabwe the SMS tool

for reporting, monitoring and eliminating NTBs

COMESA Regional Customs Transit Guarantee Scheme (RCTG)

❑ The RCTG Agreement was signed and ratified by 13 Countries (twelve

COMESA Member and one non-Member States), namely: Burundi,

Djibouti, DR Congo, Ethiopia, Madagascar, Malawi, Kenya, Rwanda,

Sudan, Tanzania, Uganda and Zimbabwe.

❑ The scheme became operational in 2012 and is fully operational in

Burundi, Kenya, Rwanda, Tanzania and Uganda.

The new RCTG mobile application enables Clearing and Forwarding

Agents to view current bond balance and view active Carnets

Its key benefit is to reduce the cost of Bond/Guarantee and

collaterals charged by Sureties and Agents.

AfreximBank African Collaborative Transit Guarantee Scheme

(AACTGS)

A programme designed to facilitate the smooth transit of goods

across Africa

COMESA signed an Agreement with the African Export-Import Bank

(Afreximbank) on the Implementation of the COMESA Regional

Customs Transit Guarantee/bond Agreement.

9

Digital Trade

10

❑ Under the AACTGS , Afreximbank will become a regional and continent-

wide guarantor, providing transit bonds covering the full range of borders

that goods are required to cross.

COMESA Virtual Trade Facilitation System (CVTFS)

❑ It is a cargo tracking system that uses electronic seals (e-Seals) to track

the movement of goods in the COMESA Region.

❑ An online system that integrates other COMESA Trade Facilitation

instruments such as the RCTG, Yellow Card, Carrier License and

Harmonized Axle Load in one platform.

❑ The CVTFS has enhanced security of Customs revenue and transit

goods as well as reduced volume of undelivered cargo lost in transit.

THE COMMON MARKET FOR EASTERN & SOUTHERN AFRICA

11

Digital Trade

12

COMESA COVID 19 Online Platform

❑ The online platform was launched on 17 July 2020 and can be accessible

on webpage at https://covid.comesa.int/

❑ The platform aims at sharing information about availability of goods and

services, especially essential commodities and services

❑ As of June 2021, 24 companies/individual or associations businesses

have registered on the platform some of which uploaded their products.

❑ It is an important tool that facilitate business operators to market their

locally produced goods and services at no cost.

❑ Member States are also encouraged to upload information and any trade

policy measure that is beneficial to all stakeholders.

❑ Sellers and buyers are encouraged to use it meet/network through the

platform through which deals can be made

Digital Trade

13

COMESA COVID 19 Online Platform

❑ The information on the platform is categorized either as public information

or restricted Information accessed using a password

❑ The system does NOT handle actual sales on behalf of the vendors –

instead it lists the available payment options as determined by the

vendors. Since contact details of the vendors are available online, the 2

parties can engage in a discussion before concluding the sale.

❑ Shipping: Vendors will be able to advise on the available modes of

shipping.

❑ The public and private sector stakeholders in the Member States have a

critical role in uploading and updating the information and effective

management of the platform. However, COMESA remain the main

administrator.

14

Fourth Industrial Revolution

Fourth Industrial Revolution and Trade

15

The Fourth Industrial Revolution (4IR) is characterized by the

amalgamation of the digital, biological and physical spheres of an

economy. It is also the growing utilization of new technologies, like AI, 3D

printing, machine learning, the Internet of Things (IoT), advanced

wireless technology and cloud computing.

TradeTech, or the set of technologies and innovations that enable trade to

be more efficient, inclusive, and equitable, is fundamental to harnessing

the innovations of the Fourth Industrial Revolution to support the public

good.

With the rise of 4IR technologies, the means to facilitate international

trade are growing too. Digitalization and advanced technologies have the

potential to significantly reduce processing times and the cost of cross-

border movements of goods and further facilitate trade in services.

4IR & Emerging Technologies :

Most transformative technologies for trade

16

Impact of Technologies on Trade

17

Challenges/Barriers to TradeTech Adoption

18

WAY FORWARD

19

COMESA Digital Free Trade Area (DFTA)

The COMESA Digital Free Trade Area (DFTA) is all about empowering

traders to do cross-border trade using ICT as a tool to minimise physical

barriers.

DFTA Segments

E- Trade e.g. COMESA Online market

E- Logistics e.g. Electronic Certificate of Origin

E – Legislation e.g. Trade Information Portal

Conclusion

The AfCFTA to maximise digitalisation and use of emerging technologies as

means to reduce the time and cost of doing business in Africa.

20

Thank you for your attention