- As AfCFTA becomes a part of the daily business environment, governments and businesses need to know how product standards and regulations protect traders and the society.
- Governments need to create an enabling environment for investors, which becomes more attractive to foreign direct investment if harmonization of standards exists.
- Other trading blocs such as the European Union are strong because they collaborate on standards and compliance regulations.
The African continent presents huge potential for growth, and the recently introduced African Continental Free Trade Area (AfCFTA) agreement promises to underpin trade facilitation and economic expansion, becoming the largest free trade area since the formation of the World Trade Organization in 1995.
The longest journey starts with a single step. Governments, public bodies, private institutions, and investors are engaging in conversations with a pointed focus on compliance standards, verification of conformities, and regulatory alignment to encourage safe import and export.
Africa’s current population of 1.5 billion people, expected to increase to 2.5 billion by 2050, demands the need for goods and services for domestic consumption and international trade to achieve sustainable economic growth and improve living standards.
The forecast for Africa estimates the fastest urban growth rate globally, according to the Organization for Economic Cooperation and Development (OECD), with cities expected to become home to an additional 950 million people.
With most of this growth happening in small and medium-sized towns, great opportunities are envisaged, accompanied by the need for food protection, much-needed infrastructure development, and essential services, all wrapped up in a green environment that is sustainable and transparent.
Hailed as a game changer for import and export
The AfCFTA has been hailed as a ‘game changer’ for intra-African trade, pivotal to boosting the economy due to its unification and solidifying of all the African countries into one binding agreement, making it historic and a first of its kind. The agreement is expected to change the face of the import and export landscape, already making an impact since it was brokered and signed in 2018.
As the AfCFTA becomes a part of the daily business environment, governments and businesses need to be aware of product standards and regulations to protect traders and society. The necessity for a safe environment for the export of goods within countries in Africa and the regulatory and compliance alignment required for promoting “made in Africa” goods for export to international markets have spurred on the recent collaboration between Afreximbank and the world leader in testing, inspection, and certification, the independent entity Bureau Veritas, to launch the African Quality Assurance Centre (AQAC) in Ogun State, Nigeria.
The state-of-the-art testing facility ensures that standards of final products for export comply with global standards across all sectors of the market, including the food chain, therefore also serving as a health and safety benefit for the predicted urban growth.
Aligned with international compliance regulations, the laboratory, through testing, ensures that “made in Africa” products are accepted internationally. Addressing the trade imbalance between import and export, the facility is making consistent inroads at balancing the playing fields.
According to Ohioze Unuigbe, Sales Director for Government Services, Africa for Bureau Veritas, and an instrumental player in the development of AQAC with Afreximbank: “Nigeria and more globally Africa have a razor-sharp focus on the conformity and compliance of goods, which is helping to accelerate safe and secure trade with Nigeria and between countries in Africa and indeed to the rest of the world. We are in a very exciting phase in the maturation of the African trading landscape, and we just need to ensure we have the right regulations in place to drive compliance.
“Our collaboration with Afreximbank has resulted in a one-of-a-kind, modern testing facility which is going to bear great fruits for the protection and facilitation of intra-African and export trade with the continent and globally.”
Read also: AfCFTA’s promise: liberating Africa from the chains of raw material export
Powerful influence of SONCAP on the economy
AQAC has also sparked the need for training and building local technical knowledge, further boosting skills, enhancing prosperity, and encouraging job creation. It is expected that further AQAC laboratories will be rolled out in due course which, in turn, will ensure ease of logistics and quality control across regions.
Bureau Veritas plays a key role in facilitating intra-African trade, helping support their clients to achieve market access for made-in-Africa products, while also facilitating and promoting relationships with International Financial Institutions, including Afreximbank.
With recent investments into laboratories to ensure compliance standards and the pre-Export Verification of Conformity programs in place, Bureau Veritas, together with its stakeholders, is determined to enhance inter-country exporting within Africa and is taking the lead on this very important topic.
In 2005, the Nigerian government introduced the Standards Organization of Nigeria Conformity Assessment Program (SONCAP), a pre-shipment verification of conformity to standards for imported products. The program addresses the concern of unsafe products entering the country and the subsequent risks to public health and safety. SONCAP provides a level playing field in terms of quality for both regulated and locally manufactured products to prevent unfair competition.
Products arriving at Nigerian entry points; ports, airports, or land borders without a SONCAP Certificate are rejected at the entry point, and the Customs release will be refused. “To date, the program has made a positive impact on products being regulated, and importers are being held accountable for their goods, thereby improving the quality of products currently reaching the country,” adds Unuigbe.
The impact of standardization on intra-African trade
“It is of vital importance that we view compliance holistically as a continent rather than through the lens of one nation. The European Union is strong because they collaborate on standards and compliance regulations. Bureau Veritas runs verification of compliance programs globally, and so we can play a pivotal role in supporting any nation comparing their programs to best practice or refining their regulations. The recently launched TIC Council Africa with Bertrand Martin, SVP Africa Bureau Veritas will not only serve as a catalyst to shaping the African trade landscape but will also ensure an eagle eye is kept on conformance and compliance across Africa,” he asserts.
Harmonization of standards and regulatory compliance are essential to unlocking the Nigerian and African economies, while also serving as an inhibitor of sub-standard product importation. Currently, 45 per cent of expired drugs end up in Africa due to a lack of standards regulations, which, in turn, negatively impacts public health and safety. Standardization of products will alleviate many of these challenges in the long term, thus reducing the impact on weighty health budgets.
The African Quality Assurance Centre will further support the Nigerian economy by ensuring the correct pricing of commodities is obtained based on the quality of the goods, which is achievable only by testing. As a country rich in raw materials that are currently being exported for processing, this will make a positive dent in the economy and Gross Domestic Product.
Read also: Stop securing loans with natural resources, AfDB urges Africa
A new trade supermarket for Africa
Governments need to create an enabling environment for investors, which becomes more attractive to foreign direct investment if harmonization of standards exists. The Nigerian market is an import-driven market highlighting the need for strong regulations to protect consumers.
The need for an independent testing, inspections, and certifications body to ensure compliance with a harmonized regulatory system and international standards is essential to creating an environment of trust and transparency; where government, businesses, investors, and consumers all benefit in a safe manner.
Afreximbank plays a unique and pivotal role in intra-African trade and the African economy. Their positive impact on trade has been well documented, as already witnessed by much interest from companies for funding to process raw materials from natural resources before export.
Afreximbank, has strategically championed the progress of trade and is now perceived as the “Trade Supermarket for Africa,” boosting the economy, and acting as a “one-stop-shop” for financial needs for the continent while also supporting regional integration on the continent. Proposing a pan-African solution of international finance that will benefit every country on the continent.
Key drivers of the economy and regional integration
In its drive to promote infrastructural development, Bureau Veritas certifications, testing and inspection certificates of quality are recognized and readily accepted internationally, making them an indispensable player in the relationships between Afreximbank, Africa and the AfCFTA. Afreximbank and Bureau Veritas together bring trust to the entire process, further encouraging much-needed foreign direct investment to the continent.
Many countries on the continent are in dire need of coverage of key infrastructures such as transport, energy, ICT, energy, infrastructure, and transboundary water resources.
One of the critical areas in the spotlight for the Nigerian government is food security. With an economy offering huge potential for growth AfCFTA and AQAC play a pivotal role in the Agricultural sector, one of the fastest-growing areas of the market. Quality testing and conformance will further enhance food security, which is also dependent on infrastructure development as an essential driver for progress and has the potential to be an enabler of sustainable and inclusive economic growth.
The African economy demands reliable infrastructure to connect supply chains and transport goods and services effectively across borders via regional corridors, central to successful intra-African trade.
Sustainability, going green, conformity and compliance
The need for regional integration is core to the success of the AfCFTA in Africa, which will help create a new ecosystem for trade. As this gains momentum, an enabling environment for the private sector to invest in the continent will be created which will further boost economic success.
Africa currently enjoys one of the lowest contributors to greenhouse emissions and has contributed the least to global warming. As and when much-needed infrastructural development is rolled out, sustainable green solutions that are inclusive and resilient are being implemented to address the infrastructure deficit.
Africa’s rich natural resources and the world’s largest free trade area, incorporating seamless regional corridors and harmonious compliance regulations, will set the stage for positive growth in intra-Africa trade.
The author, Ohioze Unuigbe, is the Government Services Sales Director – Africa, responsible for developing and rolling out the Bureau Veritas Government Services International Trade (GSIT) strategy and activities in Africa.
