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The role of cloud and SaaS in making the most of AfCFTA

By , Director: Key Account Management at Sage Africa and Middle East
Africa , 19 Sep 2022
Pragasen Moodley, Director: Key Account Management at Sage Africa and Middle East.
Pragasen Moodley, Director: Key Account Management at Sage Africa and Middle East.

In the first week of August, ships carrying thousands of tons of grain and corn left Odesa in Ukraine, the first such shipment since war broke out in February. These shipments will hopefully bring relief during a global food crisis, which has caused food insecurity for 40 million people, mostly based in sub-Saharan Africa.

The Ukraine crisis and COVID-19-related supply chain disruptions highlight how global trade is shifting. African countries, which have long relied on distant markets for exports and imports, recognise a need to create more dynamic supply chains. Free trade agreements like the African Continental Free Trade Area (AfCFTA) could spur more regional trade.

The AfCFTA was described as a game changer for African economies at this year’s Manufacturing Indaba. The agreement, which seeks to form the largest free trade area in the world, will enhance free trade by creating a single market for goods and services across Africa.

Reforms laid out by the AfCFTA could boost incomes on the continent by 9% and increase Africa’s exports to the rest of the world by 32% by 2035, according to a report from the World Bank. The AfCFTA will see intra-African exports grow by 109%, led by manufactured goods. The World Bank forecasts that as many as 50 million people could escape extreme poverty by 2035 if the AfCFTA’s goals are fully realised.

However, achieving the full potential of the AfCFTA depends on significant policy reforms, dedicated trade facilitation processes, and massive investments in digital technologies. The success of the AfCFTA is primarily tied to investments in technologies like connectivity, cloud software, payment platforms, and digital tracking and logistics systems.

Technology to enable a continent

The AfCFTA offers a chance to embed digital technologies into African economies and create a single digital economy. While digital markets across Africa are still relatively small, the AfCFTA creates opportunities to reimagine innovation policies and strategies to open digital markets to new entrants.

Cloud-based platforms facilitating continental free trade will create a single point of entry that trade stakeholders can use to submit the documentation needed to complete customs protocols. This will make the process more efficient, transparent, and secure and speed up cross-border procedures.

Similarly, developing a centralised payment system to support trade in this new trade arrangement will make it possible for anyone to transact anytime and anywhere. This system will enable payment facilitators to plug in and make secure payments on behalf of their customers.

Experts predict that emerging technologies like blockchain and the Internet of Things (IOT) can make intra-African trade more efficient, delivering cost and time savings, and improving overall decision-making for all countries across the continent.

Africa still has a way to go before it enjoys the full benefits of the free movement of goods, money, and people. Still, there is incredible potential for the AfCFTA to usher in a new era for the continent’s development. Manufacturers that invest in the right digital technologies – particularly cloud-based ERP and supply chain solutions – can position themselves to thrive in a golden age for cross-border trade in Africa.

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