April 27, 2024
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From negotiations to implementation: Namibia’s position in the AfCFTA

April 28, 2023 2097
From negotiations to implementation: Namibia’s position in the AfCFTA

The African Continental Free Trade Area (AfCFTA) stands as historic agreement negotiated by African governments to create a single market for goods and services in Africa, promote intra-African trade, boost economic growth, and create job opportunities.

The AfCFTA promises customs cooperation, trade facilitation, and standards related to agriculture and trade to eliminate unnecessary trade barriers. The agreement is a valuable tool for Namibia's private sector.

As of April 2023, 54 countries, including Namibia, have signed the AfCFTA Agreement, with 46 (85.2%) of them having ratified it as binding law. Trading under the AfCFTA officially started on 1 January 2021. The "AfCFTA-Guided Trade Initiative" pilot program began in October 2022 with eight countries: Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia.

 Namibia’s state of involvement

Namibia's signing of the AfCFTA agreement grants the country access to a market of 1.3 billion people and a combined GDP of USD 2.4 trillion. The AfCFTA's purpose is to create a conducive regulatory environment for cross-border trade in Africa by reducing tariffs and harmonizing regulatory standards. Observably, while other African countries are actively engaging in trading under the AfCFTA, Namibia's inactivity is concerning.

2023 the year of AfCFTA

The African Union has declared 2023 as the "Year of AfCFTA" to accelerate the implementation of the African Continental Free Trade Area. This presents yet another opportunity to strengthen partnerships, mobilize resources, and promote the utilization of AfCFTA by economic operators through unceasing engagement that will sustain the high momentum around the AfCFTA. Namibia needs to take advantage of this opportunity by empowering its SMEs, women traders, and youth to access new markets. In doing that, it is crucial to involve the youth in the design, implementation, and monitoring of AfCFTA-related interventions.

Implementation is critical

The Namibian government has shown leadership by signing and ratifying the AfCFTA Agreement, establishing the National AfCFTA Committee, finalizing the National Strategy, and addressing Non-Tariff Barriers which includes roads, ports, and customs systems, to make it easier to trade with other African countries. The government's efforts in sensitization and awareness creation should also be appreciated. However, this is not enough, implementation is critical. The greatest threat to the AfCFTA is incomplete or inadequate implementation. Like every initiative and inter-governmental agreement, the AfCFTA will make a difference in the lives of Namibian citizens only to the extent its promises and commitments are implemented.

From talks to action, what could be improved?

Governance and soft infrastructure

In pursuit of the effective implementation of the AfCFTA in Namibia, it is important to institutionalize the agreement and strike a balance between it and national law. The government should also incorporate solutions to address grassroots problems in Namibia in negotiations on protocols such as those on women and young traders and digital trade.

Supply Capacity

 For Namibia to participate in AFCFTA, it needs to have the necessary products and services to trade. This requires investing in building the country's productive capacity, including industrialization, education, research and development, and related endeavors to produce industrial products and services of the right quality and quantity at competitive prices.

Trade finance

The lack of finance in Namibia has prevented several viable business ideas and startups from being realized. To encourage the participation of SMEs, youth, and women in AfCFTA, existing SME finance initiatives need to be reviewed as they are not effective. The government is recommended to make efforts to access available funds from continental institutions such as Afreximbank and AfCFTA secretariat to provide critical support for countries engaging in intra-Africa trade, including adjustment funds, grants, structured trade finance, and asset-backed lending. Increased engagement with these institutions can reduce risks and build confidence associated with trading under AfCFTA.

Trade facilitation

The nation's recurrent expenditures should consider promoting production and healthy competition. There should also be an examination of the Namibia Revenue Agency (NAMRA) and how the country will trade under the AfCFTA, including resolving issues such as checkpoint barriers, customs fees, and rent-seeking practices at trade and transit corridors and border crossings.

Trade information

There should be more focus on educating citizens about the AfCFTA policy and its implementation, as well as providing the Namibian business community with sufficient information on trade and market opportunities in other African countries.

Payment System

The country through its Central Bank (BoN) can onboard the Pan-African Payment and Settlement System of the Afreximbank, which is a financial infrastructure for cross-border payments in Africa. PAPSS allows for instant and secure payments between African countries in local currencies, using advanced technology to connect banks and other financial intermediaries. This system facilitates intra-African trade under the AfCFTA. 

Finally, Namibia's growth under the AfCFTA must be collective, with the private sector investing in and championing the agreement, understanding it, and holding the government accountable for its promises and commitments. This will maximize the benefits of the agreement and allow for innovative ideas and actions to thrive.

*Frida Frans, is a Governance and Regional Integration graduate from the pan African University in Cameroon, She can be reached on This email address is being protected from spambots. You need JavaScript enabled to view it..

 

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Last modified on Sunday, 30 April 2023 18:46
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