Complying with the Rules of Origin requirement under a free trade area is perceived as the most restrictive aspect to trading. 

This was revealed by the African Continental Free Trade Area (AfCFTA) Country Business Index (ACBI) report, which was published on Monday, February 28. 

"This can be partly explained by the difficulty to conforming to these rules and maybe particularly onerous for informal and especially women,” reads part of the report.

The report presented by Stephen Karingi, the Director of the Regional Integration and Trade Division at UNECA, on the sidelines of the eighth session of Africa Regional Forum on Sustainable Development, surveyed businesses in  Angola, Cote d'Ivoire, Gabon, Kenya, Namibia, Nigeria and South Africa.

Rules of origin are the criteria needed to determine the national source of a product, and are important because duties and restrictions most often depend upon the source of imports. 

We need more business friendly rules of origin

John Bosco Kalisa, CEO of the East African Business Council (EABC), who attended the Webinar on Primer for the African Continental Free Trade Area (AfCFTA) Country Business Index Report organized by the Economic Commission for Africa (ECA) told The New Times that the rules of origin are "very complex and unfriendly” and it is difficult to enable SMEs comply with them. 

He added: "Therefore, we are advocating for a quick review of current rules of origin to take into consideration the needs of SMEs and informal cross border businesses. 

"We need more business-friendly rules of origin that are simple, flexible, transparent and predictable for the region's SMEs to take advantages provided by the wider market.”

The ACBI focuses on business perceptions of trading under the Free Trade Area by looking into constraints and challenges. It consists of three broad dimensions: Good Restrictiveness and Costs; AfCFTA Knowledge and Use; as well as Commercial Environment in particular domestic environment related to services and other "new generation issues” under negotiation in the AfCFTA.

Mama Keita, Director of the Sub-Regional Office for East Africa (SRO-EA), UNECA said the ACBI notes  Africa can boost intra-African trade by 26 per cent in 2045 only by ensuring an active engagement with the private sector in the implementation of the AfCFTA.

Kalisa noted that intra-regional trade is sliding back below 20 per cent due to persistent tariff and non-tariff barriers imposed on both large and micro small medium enterprises. 

Kalisa advocated for sensitization campaigns on the AfCFTA, harmonization of standards and sanitary and phytosanitary (SPS) measures and improving transport and logistics on the continent. 

The ACBI calls for more support to equip enterprises to identify strategic interest and market opportunities in light of the AfCFTA.

Hanan Morsy, Deputy Executive Secretary and Chief Economist, ECA said” Intra African trade is a key driver in building forward for a green, inclusive and resilient Africa.”

She urged for simplification of administrative procedures to ease of doing business across Africa and noted that the development of simplified regimes on the Rules of Origin will improve the utilization of existing FTAs and deepen value chain integration across borders.

According to ACBI, 64 per cent of firms across all countries indicate awareness of their country's participation in the AfCFTA.

The ACBI also reveals trading across borders is more challenging for female-owned firms compared to male-owned firms. The ACBI recommends African countries to design gender-specific policy responses to support inclusive implementation of the AfCFTA. 

On the second phase of negotiation of the AfCFTA, surveyed businesses in all seven countries have a relatively neutral perception of the overall policy regime in place for Services, Investment, Intellectual Property Rights and Competition. 

The ACBI also states that Africa countries should continue ratifying and signing key agreements to foster trade and investment within Africa including the Single African Air Transport Market. 

ARFSD-8 will be held in Kigali, Rwanda from March 3 to 5, under the theme, Building forward better: A green, inclusive and resilient Africa poised to achieve the 2030 Agenda and Agenda 2063.