Picture: 123RF/DMITRIJS KAMINSKIS
Picture: 123RF/DMITRIJS KAMINSKIS

Negotiations for e-commerce and digital trade under an Africa-wide free trade pact will be fast-tracked as the coronavirus pandemic heightens the need for a legal and governance framework, according to the zone’s most senior official.

The talks that were to have been part of phase 3 of what could be the world’s biggest free trade area will now take place alongside phase 2 negotiations on competition policy, intellectual property rights and investment protocols, said Wamkele Mene, the secretary-general of the African Continental Free Trade Area Agreement (AfCFTA). Discussions are expected to begin early next year.

“We ignore digitalisation at our peril,” Mene told a virtual conference organised by the Stellenbosch-based Tralac Trade Law Centre. “We’ve got to develop a very clear and compelling strategy for how we can ensure that our trade under this agreement is more efficient, more dynamic and certainly more affordable.”

While e-commerce in Africa lags other regions, it is growing rapidly. E-commerce revenues in Sub-Saharan Africa grew by an average of 24% in 2019. with a quarter of the population classified as active, online-paying customers, according to an International Monetary Fund report.

Unnecessary delays

Talks on digital trade will include measures to harmonise and speed up customs-clearance procedures between countries, Mene said. Delays at borders and regulations that differ from country to country slow regional commerce.

The 54 of the 55 countries recognised by the AU that have signed the AfCFTA are also speeding up negotiations on the taxation of e-commerce platforms, Bloomberg Law reported, citing Prudence Sebahizi, chief technical adviser and head of the AfCFTA negotiation support unit.

These talks threaten to breach a World Trade Organisation (WTO) moratorium on tariffs on e-commerce. WTO members agreed in December to continue the moratorium until a June ministerial meeting, but that meeting was canceled over Covid-19 concerns and is now scheduled for June 2021.

The first commercial deal under the free-trade area has been pushed out to January 1 from July after phase 1 negotiations on the protocol of trade in goods and services stalled due to the pandemic. The talks are now being revived and moved online.

The AfCFTA aims to bolster intra-African commerce agreements by lowering or eliminating cross-border tariffs on 90% of goods, facilitating the movement of capital and people, promoting investment and paving the way for the establishment of a continent-wide customs union. When fully operational by 2030, it could cover a potential market of 1.2-billion people and a combined GDP of $2.5-trillion.

Bloomberg

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