The Economic Commission for Africa (ECA) on Sunday May 15 launched the first-ever comprehensive tool that measures how easy or difficult it is to do business between African countries.
The AfCFTA Country Business Index (ACBI) has three key objectives, including assessing the perceived impact of the African Continental Free Trade Area on the ability of the private sector to trade and invest across African borders once the area is operational.
The idea that started in 2018 explicitly focuses on the constraints and challenges faced by private businesses, said Stephen Karingi, director of ECA’s Regional Integration and Trade Division.
Its launch took place at a side event during the 54th session of the Conference of Ministers of the Economic Commission for Africa (ECA) in Dakar, Senegal.
“It will be used to identify the main challenges the private sector faces in doing business across borders,” he said.
As stated, the tool focuses on African integration by targeting companies based and trading in African countries.
UN Under-Secretary-General and Executive Secretary of the Economic Commission for Africa, Vera Songwe, said the ACBI “is yet another measurement infrastructure” that will help gauge the extent to which broader developments related to integration and trade are implemented; as well as understanding the perceptions of the business sector on trade within the framework of the free trade agreements already in force in African countries.
Vera Songwe, UN Under-Secretary-General and Executive Secretary of the Economic Commission for Africa, speaks at the 54th session of the ECA Conference of Ministers in Dakar.
It’s not a measure of what a particular country is doing, but a measure of how easily someone in one country sets up a business in another country, Songwe said.
The index aims to examine how easy it is to do business between African countries, to trade with each other and how easy it is for a Cameroonian, for example, to set up a business in Kenya and vice versa.
It will help identify bottlenecks and resolve issues so that Africa’s private sector can operate as seamlessly in its home country as anywhere else on the continent.
Following the launch of the Index in 2018, experts began piloting and refining it as a tool to measure and compare the views of businesses across Africa on the implementation of the Space. After the first phase, in Cameroon and Zambia, the methodology was refined.
Surveys were conducted in seven other countries: Angola, Côte d’Ivoire, Gabon, Kenya, Namibia, Nigeria and South Africa.
Karingi said they now aim to cover 13 countries by July.
A report containing the results of the second phase of the deployment was presented on Sunday. As found, among others, Karingi noted, trading across borders is more difficult for women-owned businesses, something policymakers need to pay attention to and help address.
In a third phase, the new tool will be deployed in DR Congo, Egypt, Morocco, Rwanda, Senegal and Tunisia.
The index differs from other integration indices because it is fully informed by private sector perceptions, not secondary data, making it truly representative of African businesses.
Prudence Sebahizi, Chief Technical Advisor on the AfCFTA, called on the Economic Commission for Africa to improve the new tool so that it can, in the future, also be able to measure or assess the state of rules and regulations that impact trade” and what interventions can be done to improve trade performance.
“What I mean is that the ACBI provided the results of national consultations based on the perceptions of the private sector. However, no concrete reasons for these perceptions are provided nor any actions proposed to improve the perceptions,” Sebahizi later told The New Times.
The AfCFTA Secretariat plans to undertake AfCFTA Trade Policy Reviews that will assess the status of national trade-related policies that affect the implementation of the AfCFTA and propose concrete reforms to be undertaken to improve the situation.
The agreement establishing the AfCFTA officially became operational in 2021. The objectives of the zone are to create a single continent-wide market and enhance competitiveness at the enterprise level.