The AfCFTA’s Draft Digital Trade Protocol

The Protocol still needs to go through its last negotiation before being put to the Ministers at the end of October. The Protocol spends considerable effort to encourage greater use of e-documentation and e-IDs. Readers are certain to recognise this as part of a strategy by both national governments and regional communities to promote more e-government on the continent. According to an article in THE CONVERSATION,  for example, African tax administrations tend to rely on manual filing and payment of taxes. In-person interactions between taxpayers and tax officials are common, creating opportunities for collusion when paying taxes. African taxpayers also experience higher compliance costs than similar regions when navigating opaque tax systems. Kenya has faced many of these challenges. To streamline processes and make them more transparent, the country has in the last decade begun to digitise public services like tax collection. Digitisation also aims to enhance taxpayer identification and monitoring capacity and lower the costs of compliance for taxpayers. In the latest policy reforms, the country plans to introduce digital identity documents for all Kenyans by February 2024. A digital ID system, e-ID, uses digital technology across the entire ID lifecycle: capturing, validating, storing and transferring data.

The need for more e-documentation solutions has been highlighted by the African Union-backed pilot [Guided Trade Initiative], which has found that businesses are faced with lengthy border checks and varied quality standards. Companies in countries participating in to accelerate trade on the continent have complained that it often takes several months to get some of the approvals needed. Bureaucratic red tape at border posts create bigger bumps for the free movement of goods than weak transport and logistics capacity.