The digital transformation of customs and borders in Africa could improve efficiencies in processes. Better administration at customs and borders could yield trade gains on the continent of $20 billion a year. This is according to a new report by the World Economic Forum dubbed Growing Intra-Africa Trade through Digital Transformation of customs and borders, launched in Davos.
The report provides a practical perspective on the non-tariff barriers in border and customs services that can be exponentially improved through digital transformation to increase intra-Africa trade which is needed in the continent.
The AfCFTA implementation, which started in January 2021, has the potential to increase intra-African trade from its current 18% of total trade to 50% by 2030. It also has the potential to lift 30 million people out of extreme poverty. However, achieving its full potential depends on putting in place significant policy reforms and trade facilitation measures.
“The African Free Trade Area agreement can be a great catalyst for Africa’s growth and development, but its full realization hinges on the introduction of efficiencies, including the improvement of customs processes. Digital transformation of border posts and customs is thus a crucial and necessary step in the implementation of the protocol, especially for many of Africa’s landlocked countries” said Kavitha Prag, Africa Lead, Enterprise Technology and Performance at Deloitte Africa.
The report which is written in collaboration with Deloitte highlights insights from the Logistic Performance Index as well as key insights from case studies demonstrating the quantifiable value of digital reforms in countries like Ghana, Kenya and Uganda. Various countries in Africa are making efforts to build better trade networks enabled by world-class logistics networks that can withstand recent supply chain shocks such as the COVID-19 pandemic and geopolitical tensions.
“Even after tariffs are lowered and simplified procedures put in place, the full benefits of the AfCFTA will not be realized unless non-tariff barriers to trade are also addressed,” said Chido Munyati, Head of Africa at the World Economic Forum. “Policy-makers can make a difference by implementing digital solutions,” he added