Although the start of trading under the African Continental Free Trade Agreement (AfCFTA) officially began on 1 January 2021, no trade has as yet taken place under the regime.
Till date, there are still hitches in officialdom being encountered by the 1.2 billion trade bloc. NATIONAL ECONOMY also identifies a major cog in the wheel to full Intra-African trade to be colonial structures that hinder trade.
According to data from the African Union Commission, transportation costs are 45 per cent higher in African countries than the average in developed countries. Experts say the transportation infrastructure put in place by colonizing countries still exist, and unless they are removed, will continue to stifle trade, at least at the early stages of implementation.
Experts and stakeholders agree that until impediments like governments’ protectionist policies, poor road and air connectivity infrastructure are addressed head on, the high fares would continue to stifle the growth of the transportation sector on the continent. Air and road transportation would be major means of transportation when AfCFTA becomes fully operational.
Cheaper means of transportation, which partly determine the prices of goods and services, are supposed to be a source of trade creation among AfCFTA member countries, otherwise, AfCFTA will be a trade diversion.
Although the map of African commercial aviation is being transformed since the turn of the millennium, from very few international flights within the continent, and routes beyond the continent restricted almost entirely to century-old paths of colonial influence to European metropoles, criss-crossed by intra-continental flights run by African airlines, and connected by a widening range of intercontinental routes served by African and other non-European airlines, there are still a limited number of intra-Africa flights on the continent that would serve a vibrant AfCFTA market.
However, NATIONAL ECONOMY observes a silver lining that, breaking from decades of strict regionalism, African airlines now race with each other to open non-stop services from east Africa and a range of cities over the full spread of the continent. More airlines connect more cities across Africa, and across the oceans, than ever before.
Significant growth has occurred in Addis Ababa and Nairobi, alongside more established hubs in Johannesburg and Cairo.
While Africa commands less than 2 per cent of the global air travel market, Africa’s busiest route between Cape Town and Johannesburg ranks in the top ten busiest routes globally.
A report says that in the next 10 years, growing demand along this route will require an additional 970 new passenger aircraft.
Meanwhile, the national action committee on the AfCFTA says it has commenced the development of policies in collaboration with relevant export agencies for the free flow of trade in Nigeria.
Team lead, export market development, national action committee (NAC), Ogo Chukwura, disclosed this recently.
He said the policies would synergise the ministries, departments, and agencies (MDAs) that have a role in supporting the growth of trade in the country.
Chukwura said the NAC was also identifying the opportunities and developing strategies to help boost trade, adding that infrastructure development was critical to the operating environments of businesses and a key driver of cost.
He also stated that the committee was partnering with the ministry of industry, trade, and investment to develop a programme that would allow agricultural products to move seamlessly from points A to B.