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Accelerating Intra African Trade through enhanced transportation and logistics

jeudi 1er février 2024

Africa Prosperity Dialogue, Accra 25th Jan 2024
Theme Session : Accelerating Intra African Trade through enhanced transportation and logistics
CEO-Africa Union Business Council (AfBC)

1. Introduction
The Federation of West African Chambers of Commerce and Industry (FEWACCI) stands as a pivotal regional organization, representing the dynamic and diverse private sector of West Africa. Established in year 70’s , FEWACCI emerged from the collective vision of the entire Private sector in west Africa with focal point in each chambers of commerce and Industry. Its inception was driven by a fundamental objective : to give a unified voice and a powerful tool to the business community in West Africa, aimed at fostering development and reducing poverty.

Over the decades, FEWACCI has played a crucial role in advocating for the interests of the business community, not only within the West African sub-region but also in broader continental and global arenas. By facilitating public-private dialogue, promoting cross-border trade and investment, and ensuring market access, FEWACCI has become an indispensable partner in regional economic development. Its influence and activities extend beyond the confines of the business world, as it holds observer status in key meetings of both the Economic Community of West African States (ECOWAS) and the African Union, thereby contributing to policy-making processes that shape the economic landscape of the region.

FEWACCI’s mission goes beyond mere representation. It actively works towards creating an enabling environment for businesses to thrive, fostering collaboration among its member states, and championing initiatives that are crucial for regional economic integration and sustainable development. In essence, FEWACCI serves as a beacon of progress and unity, guiding the West African business sector towards a future marked by prosperity and growth.

The AfCFTA symbolizes a new era of economic integration, presenting opportunities for boosting intra-African trade.

Efficient logistics are fundamental to this vision. As the backbone of AfCFTA, logistics involves robust transportation networks, streamlined customs, and advanced supply chain management, crucial for competitive, investment-friendly, and accessible markets. FEWACCI, representing West Africa’s private sector, recognizes the significance of logistics in AfCFTA, committing to logistical improvements and trade flow enhancements.

2. Logistics Context and Private Sector Contribution in West Africa

FEWACCI significantly boosts West African logistics, aligning with the ECOWAS Treaty’s transport policies and supporting AfCFTA’s goals. Our efforts focus on developing key transport infrastructure, enhancing skills through targeted training, and fostering collaborations across sectors. These initiatives are central to improving regional trade efficiency, reducing costs, and fostering economic growth. By upgrading physical connectivity and equipping professionals with essential skills, FEWACCI aims to streamline intra-regional trade. Our collaborative approach addresses logistical challenges, harmonizes standards, and promotes a unified market, essential for a prosperous West African economy in line with AfCFTA’s vision.

3. Transport and Logistics Infrastructure Challenges

West Africa’s transportation network, encompassing road, air, and maritime sectors, faces numerous hurdles that impede the effectiveness of the AfCFTA.

- Road Transport : The region’s roads are often in poor condition, leading to increased transport times and costs. An aging vehicle fleet further exacerbates these inefficiencies, hindering road transport’s reliability for trade.

- Air Transport : Air transportation is restricted by protectionist policies, limiting access to more extensive and affordable air services. The decline of major regional airlines has resulted in decreased connectivity, affecting trade and economic activities across ECOWAS nations.

- Maritime Transport : Despite its potential, maritime transport is underdeveloped, plagued by inadequate port facilities and limited inland transport links. The slow adoption of strategies like the ECOWAS Integrated Maritime Strategy also contributes to inefficiencies in the sector.

Addressing these challenges is crucial for leveraging AfCFTA’s benefits. This requires substantial infrastructure investment and regulatory harmonization to improve trade efficiency and strengthen regional economic integration.

4. Outlook for ECOWAS Transport System Improvement

To fully harness the potential of the AfCFTA, key improvements in the ECOWAS transport system are urgently needed :

- Unified Policy Development : Establishing harmonized transportation policies across ECOWAS countries is crucial. This will streamline cross-border trade, reducing delays and creating a more efficient trading environment.

- Rail and Road Network Expansion : Investing in the expansion and modernization of rail and road networks is vital. Enhanced infrastructure will shorten transit times, reduce transportation costs, and improve reliability, particularly by connecting major economic centers and remote areas.

- Maritime and Air Transport Enhancement : Upgrading maritime facilities and expanding air transport routes and infrastructure are essential. This includes enhancing port capacities and safety for maritime transport and increasing air connectivity to lower costs and improve efficiency.

- Standardization of Transportation Services : Implementing standard procedures and regulations across different transport modes will facilitate smoother logistics operations. This involves aligning vehicle standards, cargo procedures, and scheduling systems to improve service quality and reduce costs.

These steps, crucial for the success of the AfCFTA, require collaborative efforts from governments, the private sector, and international agencies, aiming for a more integrated and economically robust West Africa.

5. AfCFTA and Transport/Logistics Services

The effectiveness of transport and logistics is key to the success of the AfCFTA. These services are central to connecting diverse production centers across Africa, ensuring efficient trade flow. However, logistical challenges like inadequate infrastructure and inconsistent standards are major obstacles to productivity and competitiveness.

- Essential Infrastructure and Standardization : A coordinated approach to improving and standardizing transport infrastructure and services is vital. Upgrading roads, railways, ports, and airways, and harmonizing regulations and logistics technologies across borders will streamline cross-border trade and reduce costs.

- Enhancing Intra-African Trade : Beyond physical connectivity, simplifying customs procedures and aligning trade policies are crucial for a seamless trade environment. Effective transport and logistics systems will facilitate increased intra-African trade, crucial for economic integration and growth under the AfCFTA.

In essence, tackling transport and logistics issues is imperative for unlocking the full potential of intra-African trade, driving economic advancement throughout the continent under the AfCFTA framework.

6. Conclusion

In the context of the African Continental Free Trade Area (AfCFTA), the significance of understanding and complying with regulations cannot be overstated for those in the transportation and logistics sector. This compliance is not only a matter of legal necessity but also a cornerstone for facilitating efficient and seamless trade across the continent.

- Importance of Regulation Standardization : One of the key steps towards achieving this efficiency is the standardization of regulations. For instance, harmonizing axle weight limits across different countries can prevent the confusion and delays often caused by varying national standards. This standardization ensures a level playing field and facilitates smoother cross-border movement of goods.

- Automation of Processes : Automating key processes, such as the issuance of the Brown Card (a mandatory insurance certificate for vehicles traveling within certain African countries), represents another critical step. Automation not only speeds up the process but also reduces the potential for errors and fraud, thereby enhancing the reliability and integrity of cross-border transactions.

- Collaboration and Electronic Documentation : Collaboration among African nations, and between public and private sector entities, is essential in developing and implementing these standardized and automated processes. Furthermore, the development and adoption of electronic documentation, available in multiple languages, is a pivotal strategy. This approach not only caters to the linguistic diversity of the continent but also expedites the documentation process, reduces paperwork, and minimizes errors associated with manual processing.

- Reducing Trade Barriers : These measures collectively work towards reducing the barriers to trade. By simplifying and standardizing processes, and embracing digital transformation, the AfCFTA can operate more effectively, enabling businesses to capitalize on the opportunities presented by a unified African market.

- Seamless AfCFTA Implementation : In conclusion, the seamless implementation of the AfCFTA hinges on these concerted efforts to streamline regulations, modernize processes, and enhance collaboration. Such initiatives will pave the way for a more integrated, efficient, and prosperous African trading landscape, bringing the vision of the AfCFTA to fruition.

Ultimately, the journey towards a fully functional and effective AfCFTA involves navigating and harmonizing a complex web of regulations and procedures. By collectively focusing on these areas, ECOWAS and its member states can significantly contribute to the realization of a truly integrated and economically vibrant African continent.