Hiccups in AfCFTA implementation
Continental business community meets over interventions
The implementation of the African Continental Free Trade Area ( AfCFTA) is now on its second year, following its delayed launch on January 2021.
However, several details still need to be flashed out for the Agreement to effectively work not only in Botswana but also the rest of Africa.
Speaking to close to 100 Small Medium Enterprises ( SMEs) from across the African continent recently, President of Business Botswana, Gobusamang Keebine said analysis so far shows that tariff reduction has to be widespread.
He said there is a small tariff reduction with only few items as countries protect their own interest, stating that this will be of no help, but instead it would not increase trade.
Keebine said there are still grey areas regarding the kind of schedule to be put in place, goods that will be excluded if any, rules of origin that will be applied in various sectors, how to deal with existing agreements, as well as to tackle non- tariff barriers, sanitary and phytosanitary quotas among others.
The head of the local business community added that addressing non- tariff bottlenecks is also critical.
“Non- tariff barriers as bottlenecks are a key issue in Africa, they have hindered progress before,” he said, adding that it is more about regulatory services for customers because these are usually about monopoly.
His view is that there is need for coordination regarding agreements to sign and understand. Further, that policy needs to be informed by the private sector because there are agreements that would work more to their advantage than others.
He also believes that the development of corridors and their efficiencies can assist in ensuring reductions in shipping costs hence increases in intra- country trade. His view is that critical to that happening is feedback mechanism to understand what is working and what is not.
Keebine said with Botswana’s economic landscape changing to the 4th Industrial Revolution ( 4IR) and knowledge economy, it is imperative for the private sector to take the lead and enhance SME competitiveness.
“BB enjoys a cordial relationship with the Government and will continue engaging and advocating for effective and innovative policies geared towards growing and capacitating SMEs,” he said, adding that Business Botswana, therefore, intends to build lasting structures that will support SME growth and development to compete both at national, regional, and international levels; critically to grow and become corporate.
SMMEs comprise 70 percent of Business Botswana membership hence the business body focuses on its development and capacitation - an area that Keebine believes is imperative in the growth and development of the economy.
He also notes a concern that he believes does not only affect Botswana but the African continent as well about long- term sustainability, whereby regional integration is a necessity for the business community to ensure that long- term maintainable yielding strategies are in place.
“This is to ensure that our economies forego the possibility of ending up in fragile states due to limited or diminishing resources, for Botswana, this is our mineral depletion,” he said.
He said the development of the private sector has been government- driven and the Covid- 19 pandemic has shown that a thriving private sector is key to the growth of the economy.
He proposes a practical shift whereby policy and strategic decisions that contribute to business growth need to be initiated and directed by the private sector.
Pan African Chamber of Commerce and Industry ( PACCI) Executive Director, Kebour Ghenna said the business community in Africa is eager to benefit from the AfCFTA that is built on social cohesion and maximisation of some ad hoc social welfare.
Ghenna said an AfCFTA that does not embrace solidarity is doomed to fail and fail swiftly. “An AfCFTA that expands inequality and only empowers the rich economies of the world should not be acceptable,” he said.
He added that instead, Africans should find another way of bringing prosperity to the continent by building the solidarity economy institutions that can become the base for popular progressive power that is needed to organise and create a transformed African economy.
“Indeed if we don’t write the rules of our continent’s trade, they will be written for us by other countries – in ways that won’t favour our society,” Ghenna said.
His view is that Africa is open for business and should be commended for adopting the AfCFTA with an eye to offering the private sector more commercial and investment opportunities.
PACCI is the strongest advocate in the African continent for pro- business, open market policies. It is also a vehicle for companies based in Africa to access a business network throughout Africa.