By Amit Jain
As the African Continental Free Trade Area (AfCFTA) comes into effect, regional trade stakeholders in East Africa have launched a data platform that will allow users to conduct due diligence checks on financial institutions, corporates, and SMEs. Dubbed as MANSA, the online platform provides a single primary source of Know-Your-Customer (KYC) data. It is hoped this will reduce the risks to intra-African trade such as increased financial crime and reduces the high-cost acquisition data. Among other things, this will increase access to financing for SMEs after the identification of business opportunities in regional markets.
Due diligence in regional and cross border trade involves accessing and identifying existing or potential compliance issues with respect to international trade and commerce, including export controls, sanctions, and customs laws and regulations. MANSA also gives insights into financial records, past company performance, among other aspects required on clients to ascertain the chances of trade. The platform championed by Afreximbank and East Africa Business council among other entities is aimed at unlocking and activating trading under the Africa Continental Free Trade Area.
The East African Community (EAC) is the first regional block to roll out MANSA. Others are expected to follow suit. According to the World Bank reduction of compliance costs and non-tariff barriers in Africa could boost incomes by US$300bn. AfCFTA is set to generate additional 2 million jobs and grow regional value chains but high cost of trade, non-tariff barriers and lack of information continues to hamper intra-African trade. The digital platform could be a game-changer by driving transparency and good governance.
Rwanda is expected to benefit most. An effective AfCFTA could increase Rwanda's exports to the rest of the continent from US$1.6bn to about US$5bn in 10 years. Among the markets that will bring fortunes to local exporters and traders including neighbouring DR Congo which is one of the leading markets for Rwandan produce. Other markets that Rwanda is eying include the Economic Community of West African States namely Nigeria, Ghana and Senegal and Economic Community of Central African States (ECCAS) including Gabon, Congo Brazzaville and Angola.