Industry sceptical about African free trade agreement

Article by Adele Mackenzie from FTW

While the African Continental Free Trade Area (AfCFTA) was signed amid much fanfare at the African Union Extraordinary Summit in Kigali, Rwanda last week, many in the freight industry are sceptical. One FTW reader, describing the 40 years of negotiations around the AfCFTA as “a joke”, questioned whether the resolutions would ever reach “the man with the stamp in hand” at the border.

Gavin Kelly, technical and operations manager for the Road Freight Association (RFA), told FTW that if this meant lower transport costs and fewer delays, it would be a good move. “However, I don’t see countries letting go of duties (which is
revenue generation for them) and there would be the smuggling aspect to deal with,” he said. Kelly queried what this would mean in terms of South Africa being able to sell its products within Africa. “Will there be no protection between states to ensure industries do not collapse? Think about the clothing, electronic goods and FMCG industries that were hit with cheap products from around the world.”

Michael Henning,
sales manager at customs software solutions company Easyclear, agreed that it could make a difference in fast tracking trade and trade facilitation, but highlighted his concerns around the controls that would be put in place to manage the process, “which in turn may produce red tape that will negatively impact the free trade agreement”. A cross-border trader who preferred to remain anonymous pointed out that for the AfCFTA vision to become a reality, there would have to be stability, good governance and no corruption on the entire continent.

“Furthermore, regardless of the free trade area, each country would still maintain their current system to maintain control
– and these are at the root of all delays.” He said that while it might be good for South Africa and Nigeria for increased exports,
the same delays would be experienced in getting the product to market Yet another anonymous trader told FTW that the
European Union was a good example of “what not to do”, pointing to the current Brexit negotiations as the United Kingdom
works on extricating itself from the trade bloc. He believes South Africa will have to follow the same