The African Continental Free Trade Area (“AfCFTA”) represents monumental shift in Africa’s economic land scape, in that it is by number the largest free trade area in the world after the World Trade Organization and the largest and population in geographical size (1.5 billion people across the world second largest continent).
AfCFTA connects 54 of the continents’ 55 countries and creates a single market of over with combined GDP of over USD 3 billion and has been established on the premise of promising the boost of intra-African trade, economic growth and reginal integration and corporation.
Botswana as a member state of AfCFTA has positioned itself to benefit from these opportunities driving its key economic growth goals of foreign direct investment attraction and economic diversification.
AfCFTA aims to expand intra-African trade through better harmonization and coordination of trade liberalization and facilitation, as well as instruments across the Regional Economic Communities (RECs) and Africa. AfCFTA aims to not only resolve the challenges of multiple and overlapping memberships but also expedite the regional and continental integration processes, and finally, the AfCFTA is expected to enhance competitiveness at the industry and enterprise level through exploitation of opportunities for scale production, continental market access, and better reallocation of resources.
Due to the challenges and risks faced by Botswana’s economy largely because of its small domestic market and its apparent over reliance on its mineral (largely diamonds) trade, Botswana continues to promote trade by pursuing free trade agreements with its neighbors as well as other developed and developing countries.
The bottlenecks faced by the AfCFTA fall into several key areas: policy and structure, implementation, distributional effects, and potential adverse impacts on certain sectors and countries.
One of the most immediate impacts Botswana faces following its ratification of AfCFTA is the need to reform its laws and regulations. Among other things AfCFTA seeks to reduce tariffs and eliminate non-tariff barriers therefore Botswana will need to revise relevant laws and regulations to accommodate new trading arrangements, especially with countries that have previously been subject to higher tariff rates. This might involve the establishment of a new tariff schedule, adjustments to trade facilitation procedures, and the implementation of more efficient customs clearance processes.
Additionally, Botswana will need to strengthen its border control systems and streamline customs procedures to meet the AfCFTA’s standards for efficient trade. Legal provisions related to customs duties, value-added tax on imports, and export regulations will require extensive amendments to ensure compliance with the bloc’s collective rules and obligations.
The AfCFTA encourages greater cross-border investment, and Botswana stands to benefit significantly, given its relatively stable economy and attractive investment climate. However, to tap into these opportunities, Botswana’s investment laws will need to adapt to a more integrated regional marketplace.
AfCFTA provisions on investment seek to create a more predictable, transparent, and investor-friendly environment. Botswana may need to revise its existing investor attraction policies to ensure that they are consistent with AfCFTA’s investment protocols, which promote equitable treatment of investors, dispute resolution mechanisms, and the protection of intellectual property rights. There may also be a need for new regulations or incentives to attract regional investors and facilitate easier investment flows within the continent.
The legal system in Botswana may need to train judges and lawyers in handling disputes within the context of AfCFTA’s trade and investment laws, as well as in applying international arbitration practices for resolving cross-border disputes. The alignment of Botswana’s judicial and legal system with AfCFTA’s dispute resolution mechanisms is key to ensuring that businesses and governments can resolve conflicts in an efficient, fair, and transparent manner.
The African Continental Free Trade Area is an exciting prospect for Botswana, bringing with it the promise of economic growth, increased regional integration, and enhanced trade opportunities. However, in order to fully benefit from the AfCFTA, Botswana must carefully align its legal and regulatory framework with the objectives of the trade agreement.
This alignment will require reforms across several areas, including customs and trade law, investment laws, services sector regulations, competition law, and dispute resolution mechanisms. While these reforms may present challenges, they also provide an opportunity for Botswana to modernize its legal system, streamline business processes, and become an even more attractive destination for investment in the heart of Africa.
As Botswana moves forward in this new era of regional integration, its legal system will play a central role in ensuring that the country not only meets the demands of the AfCFTA but also leverages its position for sustainable economic growth and development.
The AfCFTA is not just a trade agreement; it is an opportunity for Botswana to strengthen its position as a regional leader in Africa’s economic transformation.
Kago K.Y Boiki
LLB (UB), LLM (Pretoria)
