AfCTA’s new trade platform: Here’s what you need to know

The Africa Continental Free Trade Area Secretariat has recently introduced a cutting-edge digital platform aimed at enhancing trade across the African continent. This innovative platform is set to revolutionize the way intra-Africa trade operates, offering a host of benefits to member countries and businesses operating within the AfCFTA framework. In a recent interview with CNBC Africa, Francis Mangeni, the Director of Trade Promotion & Programs at the AfCFTA Secretariat, shed light on the significance of this digital platform and its role in facilitating smoother trade operations. The African Continental Free Trade Area officially came into force on May 30, 2019, after nearly four years of negotiations that culminated in its signing in Kigali on March 21, 2018, and subsequent ratification. Mangeni emphasized the inclusive nature of the AfCFTA, designed to accommodate various stakeholders including women, Small and Medium Enterprises (SMEs), and young Africans, with projections indicating that it could potentially lift 100 million people out of poverty by 2035, as per estimates by the World Bank. The launch of the digital application is a pivotal development in the implementation of the AfCFTA, creating a unified trade regime across the continent. This harmonized approach streamlines trade practices, reduces operational costs, and fosters a more conducive business environment. By standardizing trade rules and instruments, the platform aims to make the trading process more efficient and user-friendly, ultimately promoting increased commerce among African nations. One of the key aspects of the digital platform is its accessibility. As of now, 33 countries have ratified the agreement, enabling them to leverage the benefits of the platform. Access is restricted to state parties that have formally accepted the agreement and deposited their ratification instruments with the Chairperson of the African Union Commission. This ensures that only countries fully committed to the AfCFTA principles can utilize the platform for trade purposes. In terms of investments, the AfCFTA digital platform is expected to yield dividends for all African countries regardless of their size or level of development. While smaller economies often face challenges due to limited domestic markets, the continental trade area provides them with access to a vast regional market comprising a combined GDP of $3.4 trillion and a population of 1.35 billion people. This market size opens up new opportunities for small economies to attract investments and expand their export capabilities. Moreover, larger economies with established industrial capacities like South Africa, Nigeria, and Egypt are poised to benefit significantly from the AfCFTA by tapping into the expanded market and optimizing their export potential. To maximize the gains from the trade area, countries need to implement tailored strategies that align with the AfCFTA objectives and promote cross-border investments. Addressing infrastructure constraints is crucial to ensure the seamless operation of the digital platform and enhance economic development across the continent. Investing in infrastructure projects and technology upgrades will be vital in bridging gaps and facilitating efficient trade flows within the AfCFTA framework. The effectiveness of the digital technology hinges on digital literacy levels in Africa. While there are challenges in terms of digital literacy, particularly among certain demographics, such as the youth, there is a growing emphasis on fostering a conducive ecosystem for innovation and entrepreneurship. Coupled with the youthful population in Africa, there is immense potential to harness the power of technology and innovation to drive economic growth and create new opportunities. Mangeni underscored the importance of expediting the implementation of science, technology, and innovation strategies to propel Africa towards becoming a technology-led economy. Establishing an ecosystem that nurtures innovation and supports the commercialization of ideas will be instrumental in leveraging the talents and skills of the continent's young population. Countries like Rwanda and Kenya serve as notable examples of fostering innovation ecosystems that catalyze economic development and empower aspiring entrepreneurs to turn their ideas into viable businesses. As the AfCFTA digital platform ushers in a new era of trade facilitation and economic cooperation, African nations have a unique opportunity to harness the potential of intra-Africa trade for sustainable growth and shared prosperity. By embracing digital transformation, enhancing infrastructure, and fostering innovation, the continent can unlock a brighter future fueled by increased trade, investments, and economic opportunities across borders.