Trade barriers removal will unleash AfCFTA and unlock Africa’s economic potential — UNCTAD

Addressing non-tariff measures and fostering regulatory convergence could unlock $7.1 billion in annual welfare gains, boost intra-Africa trade by 6%, and raise wages across the continent, says a recent report published by the United Nations Conference on Trade and Development (UNCTAD).

While highlighting the transformative potential of the African Continental Free Trade Area (AfCFTA), the UNCTAD report also advocates for aligning African trade policies with international standards while enhancing regional collaboration and transparency. Another important issue that needs to be addressed is non-tariff measures (NTMs) because this could unlock unprecedented trade and welfare benefits for the continent. NTMs, which are designed for public health and safety and include sanitary and phytosanitary measures and technical trade barriers that vary widely across countries, present a more significant obstacle to intra-African trade than are standard tariffs.

The NTMs add complexity and costs for businesses, with regulatory divergence alone contributing to over 12% of trade costs in agri-food sectors and 2% in manufacturing, with figures rising sharply in some regions, said the UNCTAD report. But another both significant and very specific NTB that business in Africa faces is infrastructure deficiencies, says Martin Cameron, managing director of a trade consultancy Trade Research Advisory. Speaking during a recent ‘Non-Tariff Barriers and AfCFTA Trade Agreement Alignment’ panel at a Transport Forum in Johannesburg, Cameron stressed that “poor trade infrastructure” hampers growth, specifically for Africa’s 16 landlocked countries that are dependent on maritime-connected economies and their neighbor’s’ infrastructure.