Trade costs reduction for economic growth

Africa Union Commission Immediate former Deputy Chairperson Erastus Mwencha has said there is need of implementing the Trade Facilitation Agreement within the region to reduce cross border trade costs.

He noted that the efficiency of trade within the region would pivot on the support of the African continent in simplifying challenges facing regional efforts to harmonize intraregional trade.

Mwencha, who was speaking during the ongoing Second World Customs organization East and Southern Africa Regional Conference in Nairobi said, We must minimize cross border costs in Africa.

Globally, when the Trade Facilitation Agreement (TFA) is introduced and implemented, it shows that there will be a cost reduction of up to 14percent, he added.

He noted this will add to the global trade value of about Sh 100 trillion (1trillion USD) to the global GDP of about USD75trillion, bringing about new markets.

He said the tariff is about 12% when African countries trade amongst each other, but drops to 8% when they trade with the rest of the world, noting that implementing the TFA will address these challenges.

Mwencha added that the cross border trade would need to be simplified, which includes the harmonization of customs procedures, deepening standards of IT innovation and utilization to enforce the TFA’s and regional trading agreements in the ESA region.

Commissioner of customs Kenya Revenue Authority (KRA) Ms Beatrice Memo said countries in Africa own complimentary synergies in terms of their competitive advantages and borders needed to be opened to facilitate the growth, as customs is now considered a global village.

During the conference, Delegates noted that there was an increasing vulnerability of global supply chain in the midst of best efforts to facilitate trade, counter terrorism strategies, passenger controls and E- commerce as a driver for economic growth in the East and Southern Africa region.

The conference which kicked off in Nairobi on Monday and ended yesterday, had brought together 13 countries namely Belgium, Ethiopia, South Africa, Malawi, Rwanda, Australia, Mauritius, Botswana, Comoros, Zimbabwe, Madagascar, Uganda and Tanzania.

The Conference aimed at discussing the impacts and the implication of the trade facilitation agreement and was hosted by the World Customs Organization Regional Training Centre (WCO RTC) Kenya, with delegates from the Common Market for East and Southern Africa (COMESA), Intergovernmental Authority on Development (IGAD) and South African Development Community (SADC).

Source: Kenya News Agency