What is TMEA’s role in strengthening African least developed countries (LDCs)' capacity to trade?

Africa’s significant growth potential is being constrained by low trading volumes both within the continent and in terms of exports from Africa. Trade infrastructure problems, regulatory environments unaligned with the requirements of export markets, and non-tariff barriers (NTBs) make life hard for exporters, leading to a predominance of primary goods in the export portfolio and a host of lost opportunities to boost intra-African trade. Breaking down these barriers would not only raise the continent’s share of global trade but also lift millions of people out of poverty. This has been TMEA’s focus for the last decade in East Africa, the Horn of Africa and Southern Africa.

Working with regional governments, regional economic communities and other development partners, we have helped modernize infrastructure, build digital systems to speed up trade in services, harmonize standards and trade protocols, and facilitate government and private sector dialogue to address emerging issues and to support trade policy reform aimed at enhancing trade.

TradeMark has achieved substantial results in driving down the cost and time of trading across borders. For One Stop Border Posts we have supported, the time needed to cross the border has been reduced by an average of 70%. At the ports of Mombasa and Dar Es Salaam, the time has been cut in half.  

Dialogue with the private sector has been vital, especially in reducing NTBs. For instance, in 2021 we helped the East African Business Community engage with the Kenyan Government to increase aflatoxin testing capacity for grain at the border with Uganda. This reduced delays, post-harvest losses and operating costs for firms, with the Central Bank of Uganda estimating the country could have lost US$ 121 million in annual revenue if the challenge had persisted. 

What are the lessons learned?

While we have learned many lessons from trying to deliver substantive reductions in trade barriers, I can highlight three: 

• Firstly, an international approach is required. Successful trade facilitation must by its nature happen across borders, but also between countries and regional economic communities (RECs), and between RECs. The African Continental Free Trade Area (AfCFTA) will offer a critical additional tool to achieve this.
• Secondly, we believe strongly that an integrated approach is the only way to deliver results. This means ensuring that all the pieces of successful trade facilitation are done together: the hard infrastructure; the digital systems; standards and other protocols; liaison between government and the private sector; and effective trade policy.
• And lastly, nothing happens without political commitment. The success of the East African Community (EAC) over the last 15 years has had at its heart a strong drive from its respective leaders. This has provided strong incentives to overcome vested interests within institutions and to proactively solve problems between countries.

What is the future role of TMEA in Africa's trade integration?

The EAC is an example of how integrated support can drive major gains in trade. The AfCFTA provides an opportunity to take these even further and wider, bringing together 55 African Union member states with a combined population of 1.3 billion. TradeMark is supporting AfCFTA implementation within and across regional economic communities by helping the Secretariat implement its vision. It is also assisting members at the national level and putting in place cross-border trade facilities and digital systems.  

Furthermore, global developments mean that trade facilitation for the future must involve helping the continent tackle rapidly changing shifts in consumer habits and preferences on how goods are produced and transported. It must also help Africa become a pioneer in developing green exports and adopt climate resilient infrastructure. We envisage bringing partners together around a US$ 210 million green corridor programme that will reduce greenhouse gas emissions in trade corridors while helping to safeguard the continent’s economic future.  

Finally, inclusive trade is essential. In East Africa, around 70% of informal trade is conducted by women. As much as 93% of that trade stopped almost overnight when COVID-19 hit. As we have already seen with crises such as extreme weather events, COVID-19 and high commodity prices, the vulnerable can easily get left behind. So trade facilitation must ensure all segments of the economy are covered. One of the initiatives we are most proud of is our award-winning Safe Trade Emergency Programme, which helped restart both informal and formal trade quickly by promoting safe trade compliant with public health requirements.

Contributed by TradeMark East Africa