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AfCFTA: Shipping, logistics as missing components of African economic integration

AfCFTA: Shipping, logistics as missing components of African economic integration

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The failure of the newly signed African Continental Free Trade Agreement (AfCFTA), to provide for the transportation and logistics infrastructure has cast a shadow of doubt on the ability of the Continental body to attain its lofty goals of servicing an estimated 1.3billion African market in an economy with a GDP of over $4 trillion.

Although it was expected that given the peculiar terrain of Africa where many states are landlocked, AfCFTA document would have taken into account the establishment of an efficient transportation and logistic infrastructure given the good and humans must be moved from one point to the other for the integration to be worth its salt. However this was not the case going the observation by some stakeholders.

In several parts of Africa, the transportation and logistics sector has often been neglected in policy formulation, explaining why shipping and air transportation within Africa has always been done through Europe, Asia or North America and this imbalance is greatly affecting the economies of most subsahran Africa including Nigeria.

Those who understand the language of shipping for instance have noted that it is cheaper to import a container from Asia or North America than it is to import Morocco or The Gambia.

Consequently, economic experts at different fora have continued to query the omission of transport sector in the AfCFTA particularly since President Muhammadu Buhari signed for  Nigeria’s membership.

They were concerned that that singular factor was capable of derailing the much celebrated African Continental Free Trade Agreement (AfCFTA), considering that movement of goods and services under the AfCFTA regime would be difficult without a vibrant transportation and logistics program which could  make it end up as another regional document without significant impact on African economies, just like the African Shipowners Association (ASA).

According to the Secretary General of African Shipowners Association, Mrs. Funmi Folorunsho, who  made the discovery as the shipowners’ group sought to explore the logistics component in AfCFTA, this remains one of the biggest flaws of the much celebrated agreement.

Some experts have since argued that improvement in transport infrastructure, open and competitive markets in logistics and service sectors and availability of intermodal links were prerequisite to attaining the objectives of AfCFTA, but regretted that the agreement was devoid of such considerations.

AfCFTA, estimated to boost intra-African trade by 52 per cent  by 2022 according to the United Nations Economic Commission for Africa, has got the endorsement from all African countries except Eritrea which has also agreed to join the agreement.

Speaking with Daily Sun, the former Director General of Nigerian Maritime Administration and Safety Agency (NIMASA) and former President of African Shipowners Association (ASA), Temisan Omatseye, said: “I have not be opportune to read the AfCFTA document but the information we had was that surely logistics and shipping was not part of it. But I need to confirm that position when I actually get the document. I know clearly, that when it comes to African issues most of the time, logistics and shipping are not always considered because even if they were, we are the African Shipowners, the main body that talk to African Union.

“I know that we were not consulted when these agreements were put together. So who would have been the person that put these things together! Irrespective of what we are hearing, we are waiting for the protocols to be signed. So we are still going to review that document after which  African Shipowners will make their position know and ensure we are not driving in different directions from what they are doing.”

According to him, African Shipowners are pursuing national, regional and continental cargo adding that within Africa, they are looking for cabotage regime so that any cargo that move within Africa, should be done by African ships or African flag vessels owned by Africans.

He explained: “Now, there is a difference between African flag vessels and African owned vessels. For instance, we have Liberia,  which has the flag of convenient. We are not looking at those vessels that will just come and flag in Liberia and come to begin doing Africa  trade. We are looking at vessels, which are owned by Africans to begin to move cargoes between African ports.

“So if the free trade is going to happen, the majority of goods going to happen in the free trade is going to be moved by ships. The question we are asking,  what are the plans and strategies the African Union have to empower African shipowners to own the vessels to begin to move the cargo from point A to point B?”

Meanwhile, the Director General of Lagos Chamber of Commerce and Industry (LCCI), Mr. Muda Yusuf, said for the agreement to be successful,  there is need to ensure there is connectivity

He said also that the agreement should be talking about issues of tariff, issues of restrictions, issues of movement across borders, issues of trade facilitation, those are the key issues when talking about trade.

He noted: “Now, there are things you now do to facilitate the trade particularly transportation. So among those countries,  I’m sure that there would be understanding within the sub- regional. For instance in ECOWAS there have been discussions about constructing some highways that will connect the ECOWAS countries. In East Africa,  I think they have some railways that are connecting them and in South Africa, the same thing applies “

Yussuf said the issues of transportation when you’re talking about either shipping, road connectivity,  railway connectivity, are the things that need to be put in place  to facilitate trade because those things are like catalyst to trade.

He added: “But trade agreement itself is about items you need to trade in, what kind of tariff you put in place , the kind tariff barrier you remove, the kind of restriction you remove and at what time will you remove them. So the agreement is focusing more on those things.

“But when it comes to infrastructure to support the trade it is a different matter. So connectivity itself is not a trade issue but a trade facilitation  issue. These are things that can facilitate trade from one point to the other. So that is where we should be talking about shipping by connecting the countries through the waters, railways,  roads and pipelines,  all these are things you need to facilitate the trade process. And that has to be discussed in more details at regional level.”

 

 

 

 

The Sun

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