Challenges and opportunities associated with tech and trade in Africa

29 July, 2021: Webb Fontaine, one of the leading providers of Customs and Trade solutions to governments worldwide, gathered a panel of industry experts to engage in a thought-provoking conversation about ‘Technology and Trade in Africa: Challenges and Opportunities’ in its recent edition of the webinar series. The panel included Adekunle Oloyede – Comptroller, Modernisation – ICT and Risk Management Nigeria Customs Service, Fridah Kimani – Trade Facilitation Specialist – Kenya Revenue Authority and Agnes Katsonga Phiri – Executive Director Corporate Services – Malawi Revenue Authority, Michel Żarnowiecki – Director of Institutional Reforms – Webb Fontaine. Moderated by award winning journalist Victoria Rubadiri, the webinar focused on the economic stability and future of Africa. Together, the panelists delved into the innovative insights on International Trade in Africa, the impact of African Continental Free Trade Area (AFCFTA) agreement and the collaborative role of African nations in achieving economic integration as a continent.

DAWN OF A NEW ECONOMIC ERA FOR AFRICA

Agnes Katsonga Phiri believes this is an exceptionally exciting time for Africa as it is moving the member states in the direction of bigger markets and opportunities, however she also highlights the challenge of heavy investment associated with the unification. Commenting further, she says, “Africa is a mixed bag in terms of countries that are economically equipped to handle the trade demands as well as smaller countries that much prefer to rely on local trade. Perhaps, it is good thing that digitisation across the world is transforming our global economy, this could be key in solving the challenges associated with the economic merger of different states. Thus opening new avenues of online services, promotion of exports thereby boosting work-flow efficiency and positively driving the growth in manufacturing leading to a further expansion of the financial sector in Africa. Introduction of new trade policies that foster the digital landscape in Africa will benefit the countries in strategically manoeuvring the AFCFTA. It will certainly make Africa move to another level despite the differences present, of course it will require us to change our previous mindset and adapt to new ways of working as well as conducting our business locally and internationally.”

INSPIRING INNOVATION

In agreement with Agnes, Fridah Kimani added an insightful perspective from the eyes of Kenya. She remarks, “As exciting as this union is, it will certainly open up new roads for the younger population across Africa to indulge in innovation leading to even more modernized ways of working. However, the flip side to it is that Africa is still very conventional in the way it operates, unfortunately we have not advanced tremendously in the area of manufacturing, the newfound change could take some time to getting used to and perhaps it won’t come easy. On the other hand, the Intra-Africa Trade in the continent accounts only for the 17% whereas the Intra-trade in Europe accounts for over 60% and Asia about 59%. So, we have a huge gap to fill there before we can actually start reaping the benefits of this agreement. Some other critical issues that we face on a higher scale than other continents are border-terrorism, warfare amongst different countries, illegal trade practices that further delay growth and progress in our region.

ROLE OF CUSTOMS

Having experienced a similar amalgamation of member-states in the European Union, Michel Żarnowiecki sheds light on the view-point of Webb Fontaine for this historic moment in Africa’s economic history, he adds “It took the Common market and then European Union a very long time about 75 years to reach to the point of economic stability that it has reached today, the integration is a slow process that involves challenges along its way. However, it is not to say that these challenges cannot be handled, the integration of states is always beneficial in the long run. With sub-regional integration that has happened in some parts of Africa before, we do come from some experience of it. However, there is a word of caution from the experience we have had in EU earlier, we lost about 50 Billion Euros a year in VAT collections because there was this idea of getting rid of Customs as the member states unified. Thus, it is crucial to factor the role of customs in supporting this regional integration.”

COVID-19 – THE IMPORTANCE OF TECHNOLOGY

The COVID-19 pandemic transpired change in ways of working and accelerated a massive digital boost across all continents alike. Commenting on the impact of COVID-19 on Africa, Michel Zarnowiecki says, “The consequential effect of COVID-19 across Africa was sort of a mixed bag with some reports based on the continental free-trade area pointing out that there was a reduction in production, adversely affecting SMEs thus lowering overall economic output of Africa. However, Nigeria has a different story to tell as there was a good revenue generation hinting at economic success and the ability to introduce effective contingency control measures. Nonetheless, we saw a rationalisation in staff particularly in Customs during the pandemic which was challenging for most countries, although it might open perspectives for future operations in the post-pandemic era.”

Speaking on the disruption faced by supply chains across the continent, Adekunle Oloyede says, “Even though it was a challenging time for all, the borders were shut but ports were open with operations running and leveraging on technology, had little to no impact on revenue-collection for Nigeria. We already had a very non-intrusive way of making payments in place which enabled us to keep hold of our revenue collection.” While Agnes comments on the state of Malawi, “In Malawi, we had a similar experience in terms of revenue collection and while we were hit by COVID-19, and went through a change in government, our borders remained opened and we adapted to flexible working thereby ensuring lesser impact on the revenue. We saved costs on travel of course investing more in digital devices that allow work from home. These tactics helped us control the negative impact of COVID-19.”

The panel further investigated best practices, insights, statistics and deployment of strategies to manoeuvre the challenges associated with trade in Africa by employing and exploring technological opportunities and innovative applications across the entire continent.

These thought-provoking webinars form part of what is intended to be a larger ThinkTank series aimed at delivering impactful insights thereby allowing stakeholders and consumers to engage in knowledge-sharing as well as in delivering concrete business strategies.