African States Urged to Reduce Cross Border Trade Costs to Grow

African countries could add its global trade value of about 1 trillion dollars with the implementation of the Trade Facilitation Agreement leading to a cost reduction of up to 14 percent across its borders.

Former Deputy Chairperson African Union Commission Mr. Erastus Mwencha noted that the efficiency of trade within the region would hinge on the support of the African continent in simplifying challenges facing regional efforts to harmonize intraregional trade.

“We must minimise cross border costs in Africa. Globally, when the Trade Facilitation Agreement was introduced, it shows that if the TFA is implemented optimally, there will be a cost reduction of up to 14 percent. This will add to the global trade value of about 1 trillion dollars; therefore, adding to the global GDP of about 75 trillion. This is a major contribution,” he said.

“The TFA also brings about new markets. When African countries trade amongst each other, for example, the tariff is about 12 percent but when Africa trades the rest of the world, the tariff’s drops to 8 percent. Implementing the TFA addresses these challenges. Cost reduction gains our region’s markets to trade therefore optimising resource allocation,” he added.

He was speaking at the Second World Customs Organisation East and Southern Africa Regional Conference in Nairobi with delegates from COMESA, IGAD and SADC regions discussing the Impacts and the Implication of the Trade Facilitation Agreement.

The World Customs Organisation Regional Training Centre (WCO RTC Kenya) hosted the region’s senior delegates in the conference with the aim of progressing the trade facilitation agenda, within the WCO Mercator framework at the Kenya School of Monetary Studies.

The conference pulled together countries that included Belgium, Ethiopia, South Africa, Malawi, Rwanda, Australia, Mauritius, Botswana, Comoros, Zimbabwe, Madagascar, Uganda and Tanzania.

The Regional Training Centre Kenya Chair and the Kenya Revenue School of Administration Commissioner, Ms. Beatrice Memo echoed the remarks of the former AU Deputy Chairperson.

“Our countries in Africa possess complimentary synergies in terms of their competitive advantages. It is this diversity that we must leverage on to grow our economies. In light of this, we need to open our borders to facilitate the growth as customs is now considered a global village. It is for this reason that KESRA agreed to co-host this conference with the World Customs Organisation East and Southern Africa Regional Office for Capacity Building (WCO ESA ROCB) with a view of sharing experiences and find a solution for the African market challenges.”