WEF 2022: Digital reforms of customs may increase intra-African trade

The report, Growing Intra-Africa Trade through Digital Transformation of customs and borders, presented on Tuesday at WEF 22 annual meeting called for more integrated digital reforms

Reduction of non-tariff barriers, including border and customs administration, could lead to trade gains in Africa of $20 billion a year, a new report released by the World Economic Forum (WEF) at the Annual Meeting in Davos stated.

The report, Growing Intra-Africa Trade through Digital Transformation of customs and borders, presented on Tuesday called for more integrated digital reforms that can drive higher impact through public-private partnerships that sets the course for Africa’s post-pandemic recovery and growth.

Written in collaboration with Deloitte, it was presented at the convening of the Forum Friends of the Africa Continental Free Trade Area (AfCFTA), a multistakeholder group that supports implementation of the goals set out by AfCFTA through public-private collaborations.

The AfCFTA implementation, which started in January 2021, has the potential to increase intra-African trade from its current 18 per cent of total trade to 50 per cent by 2030. It also has the potential to lift 30 million people out of extreme poverty.

“The African Free Trade Area agreement can be a great catalyst for Africa’s growth and development, but its full realisation hinges on the introduction of efficiencies, including the improvement of customs processes," said Kavitha Prag, Africa Lead, Enterprise Technology and Performance at Deloitte Africa.

The report highlights insights from the Logistic Performance Index as well as key insights from case studies demonstrating the quantifiable value of digital reforms in countries such as Ghana, Kenya and Uganda.

“Even after tariffs are lowered, and simplified procedures put in place, the full benefits of the AfCFTA will not be realized unless non-tariff barriers to trade are also addressed,” said Chido Munyati, Head of Africa at the WEF. “Policy-makers can make a difference by implementing digital solutions.”

The World Bank notes that while African exports of goods and services have seen their fastest growth in the past decade, the volumes remain low at just three per cent of global trade.