The commencement of trade under the AfCFTA officially kicked off on the 1st of January 2021, and as expressed in previous newsletters, the AfCFTA aims to create a single dependent wide market for goods and services and to promote the movement of the capital and natural persons which would expand intro African trade and also resolve the challenges of overlapping memberships in regional economic arrangements.
The AfCFTA highlights youth and women empowerment in its Agenda 2063. In the last edition, we discussed youth empowerment. In this week’s publication, we are focusing on women’s empowerment.
Gender equality has been a crucial and sensitive topic globally in recent times and the AfCFTA seeks to address this. In Africa, there is a huge wage discrepancy between men and women, and findings in a recent study in an African country depict that 61% of the females’ are remunerated below the median of the sample in comparison to 39% of males. Also, 63% of moles are remunerated above the median in comparison to 3.7% of females in the sample. Women account for about 90% of the labour force in the informal sector and are huge players in informal cross-border trade activities. The AFCFTA through its structure and agenda can provide a pathway for micro, informal, and small enterprises owned by women to be incorporated into the global markets.
The AfCFTA report “Making the AfCFTA Work for Women and Youth 2020”, estimates a higher wage for women of up to 10% increase through implementation of the AfCFTA. The AfCFTA expects that by 2035, the income for female labour (both skilled and unskilled) would be about 4.0% and 3.7% higher than what it currently is.
One of the core objectives of the AfCFTA Agreement is to promote and attain sustainable gender equality. Some of the ways this would be achieved is through:
Improving the export capacity of both formal and informal service suppliers, with particular attention to micro, small and medium-size for women.
- An output in labour-intensive industries such as textiles, wearing apparel, and leather. This is expected to employ women and their wages are expected to grow faster.
- Employment of more women in the agricultural sector. It is estimated that women represent about half of the labour force in the agricultural sector.
Provision of a means for women to top into and benefit from regional export destinations while using the regional markets before expanding into the global market - Reduced tariffs that would ensure affordable means for women in the informal sector to trade through formal channels and provide a safer means for them to do so.
Some of the ways African Countries con individually improve women empowerment in their countries and further strengthen intro-African trade include:
A. Addressing Corruption, Insecurity, and gender-based harassment
Women account for about 70% of informal cross-border trade in Africa. Due to the weak low enforcements in certain regions, women are usually vulnerable to violence, unfair confiscation of goods, and sexual harassment. Some of the traders attempt to bribe the officers in order to escape taxes and legal documentation. The AfCFTA can address these issues by the successful implementation of tariffs. Provisions that will facilitate trade for small-scale traders through the elimination of tariffs and import duties for commodities, a common list of low-value exports for duty-free markets access with a focus on products of particular importance to women traders. Also, educating the current border officials to stop the unnecessary harassment of women at these borders.
B. Address the poor basic infrastructure and facilities
There is a lack of basic infrastructure at most African borders to accommodate the needs of small-scale traders such as lack of electricity, transport, storage facility, and sanitary facilities (especially in the case of women). The significant point here is due to the poor quality or absence of storage facilities, traders will have to sell unpreserved stock at a loss or lower price to prevent them from going bad.
Some of the women who deal in perishable goods usually fall victim to this occurrence and hence render them at a disadvantage in the market.
This situation can be remedied through the “implementation of the provisions under the customs corporations annex that addresses infrastructure gaps in order to enhance interconnectivity for trade facilitation.”
C. Address the Limited Access to Finance
Another issue that would need to be addressed is the limited access to finances for women. As it is more difficult for women to access finances when compared to their male counterparts. In developed and developing countries. It is difficult for women to access basic financial services such as holding bank accounts and microfinance. With their limited access to finance, women face greater difficulties in collecting and saving income as well as growing their businesses.
When it comes to trade, access to basic financial services is one of the conditions for eligibility for trade finance products. As international trade carries a lot more risks than domestic trade, the credit requirement by financial institutions on clients with regards to collateral credit, worthiness, and finances are usually higher.
Research shows that despite 100% of women who request and are entitled to receive trade finances, only about 18% of them receive adequate finances. These statistics are quite low and will have to be addressed for women to benefit from the AfCFTA.
By disregarding the informal trading activities carried out by women, African nations are missing out on a significant portion of their trade which at the moment can prove detrimental to the economies of various African notions. The AFCFTA through its agenda con fix all of this and not only aid in bringing about a singular trade market for the region which could go a long way in the growth of the economies, but will also aid in empowering women in the society and giving them the recognition they deserve.