Policy Advice on the AfCFTA, Trade in services, E-commerce, and Digital trade

The Project at A Glance

In a bid to increase intra-regional trade and promote regional integration across the African continent, the African Union launched negotiations for the African Continental Free Trade Area (AfCFTA). The Agreement was adopted and opened for signature in March 2018 and entered into force a year later in May 2019. At present, 54 countries have signed the Agreement while 44 have also deposited their instruments of ratification. The AfCFTA will create the largest free trade area in the world, with respect to the number of participating countries.
Against this backdrop, International Economics Consulting Ltd. (IEC), through the Programme Cooperation Agreement signed with UNECA, assisted African Small Island Developing States (SIDS) in negotiating and implementing their trade integration agenda. IEC also supported UNECA’s work in advancing trade in services, e-commerce, and digital trade across the continent.

What We Found

In the context of this project, IEC undertook numerous studies including developing the Union of Comoros’s and the Republic of Mauritius’s national AfCFTA strategy.
Comoros is one of the most fragile economies in Africa. The Comorian economy remains marked by weak growth and a precarious budgetary situation, exacerbated by the COVID-19 pandemic. The country has recorded a variable GDP growth rate over the last ten years, with an average of 2.4%, mainly due to the country’s structural deficiencies, namely a small population, a narrow productive base and geographical remoteness. The AfCFTA offers opportunities for the diversification and revitalisation of the Comorian economy. The potential of Comoros within the AfCFTA framework was explored in regard to five strategic sectors, namely agriculture, fisheries, ICT, tourism and essential oils.
While trade has been a centrepiece of Mauritius’ economic success, its trade pattern with the African continent has been insignificant. South Africa and Madagascar are the only African countries that account for a relevant share of Mauritius’ merchandise exports. Mauritius is yet to exploit Africa’s potential as a source of raw and intermediate materials. In this context, the AfCFTA represents a potential tool for advancing trade and development in Mauritius. Mauritius currently possesses competitive strength in pharmaceutical products, agriculture and food processing, higher education services, ICT services, textiles and apparel, and jewellery.

Our Strategy and Impact

Negotiating a free trade agreement is only half of the way. Effective implementation is crucial to ensure that the negotiated benefits are effectively passed onto countries. Thus, with regard to both countries, it is important for them to adopt the necessary institutional frameworks to implement and benefit from the AfCFTA. It is equally important for them to build the capacity of the private sector to exploit the opportunities of the AfCFTA. Thus, the strategy aims to:

Provide a guide on how Comoros and Mauritius may enhance economic diversification, promote social-economic development, expand their trade in both goods and services, boost investment potential by capitalising on comparative advantages and contribute to value-chains both at the regional and continental levels.
Mainstream cross-cutting issues including gender, environmental and climate change mitigation, and digital technologies.
Provide the essential institutional framework to navigate through the AfCFTA and the distinct measures to be undertaken to ensure Comoros and Mauritius reap the maximum benefits of the AfCFTA.

Our Core Solutions

With the rapid proliferation of trade agreements worldwide, there are new market and investment opportunities for countries to explore. At International Economics Consulting, based on our extensive experience in international trade, we assist our clients by providing a detailed analysis of the key impacts of new trade agreements on their operations and competitiveness through an assessment of tariff, and non-tariff barriers, provisions on rules of origin, customs efficiency, the effectiveness of transport networks, and sustainability provisions, among others.
We can help assess the opportunities in different markets, determine the feasibility and viability of projects, and benchmark the wider ecosystem to support business growth. We also support clients in navigating the policy landscape regarding international trade by establishing robust monitoring and evaluation framework through sophisticated real-time dashboards and reporting systems to ensure the best outcomes.