Lessons from SADC for the AfCFTA: The case of Mozambique
Authors
Mozambique has signed and recently ratified the African Continental Free Trade Area (AfCFTA) agreement. To help prepare for implementation, Samuel Zita and ECDPM’s Bruce Byiers and Poorva Karkare review the country’s experience of participating in the Southern African Development Community Protocol on Trade in Goods and draw lessons from the practical challenges.
Employment trends and high levels of informality all underline the importance of focusing on job-creating exports, beyond the extractive sector.
Summary
Mozambique has signed and recently ratified the African Continental Free Trade Area (AfCFTA) agreement. This study review’s the country’s experience of the Southern African Development Community (SADC) Protocol on Trade in Goods and draws lessons for designing AfCFTA-related policies.
Collected evidence suggests that, while imports to Mozambique have been rising, much of this is from outside Africa, while imports from the region are arguably not driven by the SADC free trade agreement (FTA) per sé. Administrative, logistic and infrastructure hurdles have limited the use of the SADC FTA and thus its impact, while evidence suggests that the main tariff reductions led to lower levels of misreporting and border corruption rather than increasing import volumes. Although this does not preclude some competition from SADC imports, it implies that the overall effect of the SADC FTA has been limited in terms of displacing industries or stimulating structural change.
Mozambican exports to South Africa and the region grew over the SADC FTA implementation period but these relate primarily to the extractive sectors. Nonetheless, Mozambique has seen some ‘new’ export products over the last 15 years, with documented cases of small-scale SADC-focused investments.
These examples, and the challenges of using the SADC FTA should offer guidance for taking advantage of the AfCFTA. The paper concludes that the political momentum around the AfCFTA and recent industrial policy efforts can, and should, be used as a tool to promote job-creating exports to SADC and the continent through a problemsolving approach to promote further export development.
