Lack of trade facilitation and high transaction costs among main causes of weak economic integration in North Africa (Hachem Naas)

Aswan (Egypt), 28 November 2019 (ECA) - Participants at the ECA Office for North Africa expert group meeting on “Trade Facilitation in North Africa for Enhanced Regional Economic Integration: Challenges, Opportunities and the Way Forward”  presented a set of recommendations for North African countries to be able to strengthen their regional integration, improve  their  competitiveness on global markets, and make the most of the newly established African Continental Free Trade Agreement (AfCFTA).

The meeting, which was held on 25-28 November in Aswan (Egypt), in partnership with the Egyptian Ministry of Planning, Monitoring and Administrative Reform, called on North African countries to adopt a comprehensive and coordinated sub regional approach to trade facilitation, which would include improving existing transport and logistics infrastructures (roads, railways and ports), stepping up the use of information and communications technologies (ICT), and simplifying and harmonizing customs and border procedures.

Other recommendations included integrating trade facilitation into national development strategies; developing a regional roadmap for implementing trade facilitation measures in North Africa; adopting a targeted regional approach to promote diversification, job creation, and technological upgrading. Other key points included the widening the use of digitization in regional and national trade facilitation policies to help accelerate trade while limiting its costs; and developing regional road infrastructure and rail networks.

“Lack of trade facilitation and high transaction costs are some of the main causes of limited economic integration in North Africa. Tackling the challenges of trade facilitation in the sub-region is critical and requires a comprehensive, and coordinated sub-regional approach to improve infrastructures, services and the simplification and harmonization of customs and border procedures”, said Lilia Hachem Naas, Director of the ECA Office for North Africa. “Our meeting aimed to produce a set of concrete recommendations on how to tackle trade facilitation issues and create a more conducive business environment in North Africa based on good practices and lessons learned”, she added.  

The share of intra-African exports as a percentage of total African exports is relatively low, compared to other regions, said the Deputy Minister of Planning, Ahmed Kamaly who emphasized the need for comprehensive domestic macroeconomic reforms in the region in order for the AfCFTA to achieve its purpose.

Kamaly added that “this should be combined with higher investment in infrastructure projects to improve market access; the provision of better training for the African labor force; the adoption of strengthened institutional and legal mechanisms for the implementation of intra-regional trade agreements and the promotion of economic diversification in the region by establishing stronger links between agricultural and industrial production. Lastly, we need to reduce existing bureaucratic impediments to trade and investment in Africa”.

Trade facilitation is a comprehensive and integrated approach to reduce the complexity, length and cost of the trade transaction processes, which aims to ensure that all trading operations can take place in an efficient, transparent, and predictable manner, based on internationally accepted norms, standards and best practices. Trade facilitation reforms improve trade performance by enhancing the quality of the regulatory environment, basic transport and communications infrastructure. At the same time, these reforms seek to optimize the effectiveness of regulatory controls to ensure the safety and well-being of consumers and the collection of appropriate taxes and fees.

Improvement in trade facilitation can play a key role in strengthening North Africa’s regional and international trade performances and deepening its market integration.

The expert group meeting on “Trade Facilitation in North Africa for Enhanced Regional Economic Integration: Challenges, Opportunities and the Way Forward” was held in parallel to ECA’s 34th Intergovernmental Committee of High Officials and Experts (ICSOE) for North Africa. It provided participants with an opportunity to share their knowledge and best practices on the implementation of national trade facilitation programs, promoting the use of international standards and applications in single window and paperless trade projects.

Following the meeting, the ECA Office for North Africa will publish a detailed report on trade facilitation in North Africa for enhanced regional economic integration; including challenges, opportunities and proposed way forward. 

[Arabic Version]

Issued by:

Communications Section
Economic Commission for Africa
PO Box 3001
Addis Ababa
Tel: +251 11 551 5826