African countries urged to develop AfCFTA Country Business Index
INTERNATIONAL - African countries have been urged to develop country-specific business indexes to harness the potential of the African Continental Free Trade Area (AfCFTA) Agreement.
The urgent call was made by officials from the UN Economic Commission for Africa (ECA) and African Union (AU) on Wednesday as experts drawn from African countries and pan African institutions gathered in Ethiopia's capital Addis Ababa to "review, critique and refine" a draft methodology for the AfCFTA Country Business Index.
David Luke, Coordinator of the African Trade Policy Centre at the ECA, told the experts meeting the vital importance of Country Business Index to harness opportunities presented by the continental free trade pact.
"The Index will not only further contribute to a better understanding of the challenges that private sector operators and traders at various levels face but also provide a tool for articulating their challenges to policymakers," Luke said.
According to the ECA, African businesses currently face "many constraints" including high trade costs, divergent regulatory frameworks and governance issues that undermine their effective operations on the African continent.
"These bottlenecks are expected to be addressed by effective implementation of the AfCFTA agreement," the ECA said in a statement on Wednesday, adding that the proposed AfCFTA Country Business Index "is a robust tool designed for measuring and monitoring businesses' experience with AfCFTA implementation at the country level."
Prudence Sebahizi, Chief Technical Advisor and Head of the AfCFTA Unit of the AU Commission, also noted that the Country Business Index should be designed in a way that it complements other initiatives and tools including the African Trade Observatory and Pan-African Payment and Settlement System that aim to support the implementation of the continental free trade pact.
Sebahizi further called upon experts "to fine-tune the methodology to be developed using indicators that are easily measurable and understandable to support policy-making decisions that maximize the AfCFTA benefits for the private sector."
The AfCFTA Country Business Index methodology is expected to be refined and piloted in selected countries that are Cameroun and Zambia, and be validated in November this year, according to the ECA.
The expert group meeting, among other things, "critically reviewed the proposed dimensions and indicators of the AfCFTA Country Business Index, with special a focus on possible improvements.
The expert group meeting, which brought together experts from AU member countries, regional economic communities, the private sector, academia, and development institutions, envisaged to contribute to Africa's regional integration ambition, with particular emphasis given to the continental free trade pact, it was noted.
"The meeting is part of a wider project aimed at deepening Africa's trade integration through effective implementation of the AfCFTA," the ECA said.
The AfCFTA was officially launched in July this year in Niamey, capital of Niger, which marked the operationalization phase of the continental free trade pact, which has so far signed by 54 African countries of which of 27 countries have deposited their instruments of ratification to the AU Commission.
The ECA also stressed its ongoing partnership with the AU, the International Trade Centre (ITC), the UN Conference on Trade and Development (UNCTAD), Afreximbank as well as a selection of independent trade experts so as to contribute to an effective AfCFTA implementation.
Once fully operational, the free trade accord is projected to boost the level of intra-Africa trade by more than 52 percent by the year 2022, according to the ECA.
The 55-member pan African bloc, AU, also lauded the AfCFTA for "laying the foundation" for what could be the world's largest free trade zone by the number of participating countries, covering more than 1.2 billion people with a combined gross domestic product of 2.5 trillion U.S. dollars. Enditem