Abuja: The African Continental Free Trade Area (AfCFTA), introduced in 2021, aims to enhance intra-African trade by reducing tariffs and removing trade barriers, marking a crucial step towards greater economic integration across African nations.
According to News Agency of Nigeria, the World Bank estimates that AfCFTA could increase Africa's exports by $560 billion, particularly in manufacturing, and raise the continent's income by $450 billion by 2035. The initiative seeks to improve Africa's global trading position and drive industrialisation by eliminating 97% of tariff lines on goods and services. Prior to AfCFTA, intra-African trade constituted a mere 15.2% of the continent's total trade compared to higher percentages in other regions. Marginal improvements have been observed between 2022 and 2023, with intra-African trade making up 14 to 18% of total trade.
The African Export-Import Bank (Afreximbank) reported a 7.2% growth in intra-African trade in 2023, with Southern Africa leading the charge. Yet, challenges such as high trade costs, inefficient border procedures, and inadequate infrastructure remain. Customs leaders, development partners, and technical experts recently gathered in Nigeria for the fourth World Customs Organisation (WCO) Donors' Conference for the West and Central Africa (WCA) Region to address these issues.
The conference's theme highlighted the commitment to transform customs operations through technical interventions supported by development partners. Adewale Adeniyi, the Comptroller-General of the Nigeria Customs Service, noted several technical challenges impeding effective trade facilitation and revenue collection in the WCA region. Adeniyi emphasized the need for donor support in areas like regional interconnectivity, human resources development, technology-driven illicit trade detection, and regional single window integration.
Speaking at the conference, Mr. Wale Edun, Minister of Finance and Coordinating Minister of the Economy, underscored the untapped potential of the WCA region. Despite representing a market of over 450 million people, intra-regional trade accounts for just about 12% of the region's total trade volume. Edun highlighted the need for modernising customs procedures to boost trade and create jobs.
Emerging challenges, such as reciprocal tariffs from the U.S. and reduced foreign assistance, further complicate the trade landscape. Edun stressed the importance of accelerating AfCFTA implementation, boosting domestic revenue, and investing in resilient trade systems. The President of the Lagos Chamber of Commerce and Industry, Mr. Gabriel Idahosa, emphasized the need to promote intra-African trade under AfCFTA.
Experts and global institutions highlight the necessity of harmonising trade policies and reducing barriers for intra-African trade to thrive. The World Bank notes that streamlined customs and lower tariffs can significantly reduce border clearance times. Customs expert Dr. Eugene Nweke called for the harmonisation and simplification of customs procedures to boost regional trade.
Ultimately, comprehensive policy reforms, infrastructure upgrades, financial support, and private sector engagement are essential to boosting intra-regional trade in West and Central Africa. The WCO-WCA donors' conference represents a significant step towards mobilising resources and partnerships to realise Africa's trade potential.