TradeMark Africa’s Trade Facilitation report explores how digitialisation is reshaping African trade.
According to TradeMark Africa (site), trade facilitation is transforming Africa’s trade landscape. The organisation’s latest report, Trade Facilitation Report: Driving African Trade through Digitalisation, lays out in detail how contemporary approaches and a shift toward digital are reshaping African trade. Below is a summary of the report, which was published December, 2024.
AfCFTA – A True Commitment
With falling costs and enhanced political commitment through the African Continental Free Trade Area (AfCFTA). From 2010 to 2021, comprehensive trade costs dropped by 7.3%, supported by a 2.1% reduction in non-tariff costs. These gains are driven by improved trade policies and streamlined processes, creating a foundation for increased trade activity across the continent.
Africa is Experiencing Exciting Growth in Digitally Delivered Services
Digital trade is on the rise, with Africa’s exports of digitally delivered services soaring to $36.7 billion in 2023—a fourfold increase since 2005. This growth outpaces that of goods exports, emphasizing the transformative potential of digital services. Proactive adoption of technology could further double Africa’s global share of digital exports, strengthening its position in the global trade ecosystem.
Digital Interventions Have Had a Significant Positive Impact
The adoption of digital tools has revolutionized trade processes across Africa. Initiatives like electronic Single Windows, Integrated Customs Management Systems, and Regional Electronic Cargo Tracking have reduced the time and cost of trade. In East Africa, TMA’s collaborations with governments have resulted in a 29% increase in monthly trade transactions and a 15% rise in transaction value, demonstrating the tangible benefits of digital interventions.
Africa’s Digital Transformation Faces Challenges
Despite significant progress, Africa’s digital transformation faces hurdles. Limited internet access and regulatory fragmentation, especially in intra-regional payment systems, pose challenges to trade integration. Additionally, risks related to data governance, sovereignty, and cybercrime are growing concerns. To address these, the African Union’s Digital Transformation Strategy (download) provides ethical guidelines for ensuring secure and inclusive digital trade practices.
Futureproofing Digital Trade in Africa
Emerging technologies like Artificial Intelligence (AI) and Distributed Ledger Technologies (DLT) are critical to Africa’s trade future. TMA’s partnership with IOTA on the Trade Logistics Information Pipeline (TLIP) exemplifies how innovative solutions can tackle issues like falsified trade documentation. By leveraging these advancements, Africa can build a robust and transparent trade environment that fosters growth and inclusivity.
A Promising Path Ahead
According to TradeMark Africa, with the AfCFTA as a catalyst and digitalisation driving efficiency, Africa is well-positioned to become a leader in global trade. Overcoming challenges and embracing cutting-edge technologies will ensure a resilient and inclusive trade ecosystem, boosting the continent’s economic growth and global competitiveness.
The report can be downloaded here.
For more stories and news of African trade, visit our dedicated archives.