[Blog] The AfCFTA Protocol on Women and Youth in Trade: An anchor of inclusive trade and development Bereket Alemayehu

Bereket Alemayehu

Since the Agreement Establishing the African Continental Free Trade Area ("AfCFTA") was signed in 2018, its scope has expanded, demonstrating the ever-widening ambit of trade agreements. Its Protocols on Trade in Goods, Trade in Services and Dispute Settlement came into force in 2019, which was followed by the start of trading on January 01, 2021. New Protocols have been added to the AfCFTA in 2023 and 2024 in other areas.

The African Union Assembly, the AfCFTA's highest decision-making body, adopted the Protocols on Investment, Intellectual Property Rights (IPRs) and Competition Policy in 2023, and, a year later, on Digital Trade, and Women and Youth in Trade. These Protocols will come into force once State Parties finalize the respective outstanding issues and ratify them.

All the Protocols cover the diverse but interrelated aspects of trade and investment, reinforcing the AfCFTA's grand objectives. The AfCFTA aims mainly at creating a single continental market for trade and investment and helping its State Parties achieve sustainable and inclusive development.

Among the innovative features of the AfCFTA is its Protocol on Women and Youth in Trade (the "Protocol"). The Protocol makes the AfCFTA the first trade agreement with an autonomous and binding legal instrument on issues of women and youth traders. It can help mainstream women and youth traders-related issues in implementing the AfCFTA Agreement.

The Protocol can also promote inclusive trade and development, given the unique demographic aspects of trade on the continent. Africa's population is predominantly young, representing "almost a billion people (540.8 million 0-14 year olds and 454.5 million 15-34 year olds)". The youth's innovation and entrepreneurship are essential for boosting intra-African trade and investment. With 85% of economic activity in Africa being in the informal sector and 80% of businesses being MSMEs, women also play important roles. It is estimated that women conduct 70% of informal cross-border trade in Africa.

Despite the huge potential contribution of women and youth traders, they face several challenges. A UNECA and WTO report shows that women and youth traders face similar challenges in Africa, including high transaction and information costs, lack of economies of scale, low productivity, difficulties complying with regulations and limited access to finance. Another report of the AfCFTA Secretariat, UNDP and UN Women reveals similar and other problems that women traders particularly encounter. These include difficulty in accessing trade information, limited representation in professional networks and trade associations, and sexual harassment.

It is in this context that the Protocol was added to the package of the AfCFTA Agreement. In line with Article 3(e) of the Agreement, the Protocol aims at attaining sustainable and inclusive socio-economic development, equality for women and youth and structural transformation of State Parties. Its specific objectives include helping women and youth traders effectively participate in the market, promoting value addition and innovation for increased imports and exports by them and supporting their inclusion in regional and continental value chains. These objectives dovetail with the AU Agenda 2063 (particularly Aspiration # 6) and the UN Sustainable Development Goals (particularly Goals 5, 8 and 9).

The Protocol rightly recognizes the challenges facing women and youth traders. Accordingly, it provides various ways of addressing the problems.

Some aspects of the Protocol stand out. Most importantly, the Protocol, although it requires or exhorts State Parties to act in some ways, respects their right to regulate their economies without undermining it. They, thus, can adopt policies and laws that affect women and youth traders to achieve their national policy objectives. The Protocol also rightly grants State Parties flexibility to take measures tailored to their contexts and needs.

In many areas, the Protocol imposes general obligations on State Parties, based on which they must take action to achieve the specific objectives. These include removing tariff and non-tariff barriers and supporting women and youth traders to get IPRs protection (setting up the necessary institutional mechanisms, capacity building, etc.) and to effectively participate in digital trade and competition. In this regard, based on the Protocol, a Ministerial Regulation on Preferential Market Access is being prepared, which is expected to help ease market access and other trading conditions for women and youth traders.

Other rules of the Protocol are hortatory, advising (instead of obliging) State Parties to take measures along the suggested lines. This is perhaps because most of the activities in this group demand significant financial resources and a longer period to be achieved. Included in this category is developing the productive and export capacity of women and youth traders.

The Protocol also directs the attention of State Parties to the major challenges of women and youth traders, particularly MSMEs and small-scale cross-border traders. These include limited access to finance, inadequate participation in policy formulation and implementation, and sexual harassment and related practices. Moreover, the Protocol emphasizes supporting women and youth-owned or led MSMEs. In this regard, a report of ECA and KAS on the initial phase of the AfCFTA Guided Trade Initiative found that MSMEs, albeit exporting in small consignments, are facing high freight and logistics costs, accentuating the need to address their unique challenges. The Protocol also requires State Parties to support women and youth engaged in small-scale cross-border trade, such as by simplifying registration systems.

While the adoption of the Protocol is commendable, State Parties need to do more to implement it and achieve its developmental objectives. They need to ratify the Protocol swiftly, as only then can it serve as a binding instrument for taking domestic measures. In the meantime, however, they would benefit from taking preparatory measures, such as organizing sensitization events. With stakeholders' participation, State Parties also need to review and reform their national legal and institutional frameworks to be aligned with the Protocol. Furthermore, they need to build the capacity of their relevant agencies (trade promotion, regulatory, and enforcement agencies) and strengthen their engagement with women and youth traders (their associations) as well as other stakeholders.

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Bereket Alemayehu is a consultant at the African Trade Policy Center, Regional Integration and Trade Division, United Nations Economic Commission for Africa.

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