The successful implementation of the African Continental Free Trade Area (AfCFTA) will require political will.
This was observed by experts and policymakers who are in Kigali for a three-day meeting of the Intergovernmental Committee of Experts (ICE) focusing on the implementation of the AfCFTA.
While 49 countries on the continent have signed the Agreement establishing the AfCFTA, only 12 countries have so far ratified it.
There must be 22 ratifications for the agreement to come into force.
The countries that ratified the AfCFTA so far are: Chad, Côte d’Ivoire, Ghana, Guinea, Kenya, Mali, Niger, Rwanda, Sierra Leone, South Africa, Swaziland and Uganda.
David Luke, Coordinator of the African Trade Policy Centre at the United Nations Economic Commission for Africa (ECA), shed light on AfCFTA modalities on goods and implications for Africa, with a focus on the 14-state Eastern Africa region.
Luke highlighted outstanding issues and noted that although progress with signings and ratifications is seen, there are several issues to be resolved before completing phase one of AfCFTA negotiations (on trade in goods and trade in services).
According to him, AU member States need to agree on rules of origin as well as develop market access offers on trade in goods and trade in services.
He said: “The second phase of AfCFTA negotiations will be conducted on investment, intellectual property rights, competition policy and possibly e-commerce.”
While emphasising the importance of the private sector owning the process of the agreement’s implementation, Soraya Hakuziyaremye, Rwanda’s Minister for Trade and Industry, noted that despite the ups and downs in the region, the momentum that the AfCFTA has created is commendable.
For Prudence Sebahizi, Chief Technical Advisor on AfCFTA at the AU Commission, it is only political commitment that will make governments sign and ratify the agreement.
He said: “It is political will that will make parliamentarians endorse the agreement. But, more importantly, it is important to create institutions that will facilitate the agreement’s implementation. All that takes political will.”
Frank Matsaert, the Chief Executive Officer of TradeMark East Africa (TMEA), noted that there was need to involve the private sector in the process.
Among other things, he noted, there’s need for an action plan.
“It’s not just about the what, it’s also about the how; how this trade agreement is going to be implemented. And it needs engagement not just from big businesses but also from small businesses and even traders because this one will affect everyone across the continent,” he said.
If the deal is fully implemented, exports from East Africa to the rest of Africa would increase by almost a third, according to official estimates.
Intra-African trade is expected to increase by 50 per cent once the AfCFTA is implemented.
Luke also noted that key questions that still need to be addressed include deciding which approach to adopt for liberalising trade in goods under AfCFTA.
“The choice is not neutral as the two approaches are expected to lead to very different outcomes.”
He explained that if it has been agreed that 90 per cent of tariff lines or value of imports (depending on the approach to be picked) will be deemed non-sensitive and liberalised early in the process, there is no agreement yet on how to deal with the remaining 10 per cent.
“To assist AU member States to address these issues, ECA has developed a toolkit proposing several options or criteria to come up with lists of excluded, sensitive and non-sensitive products (criteria related to tariff revenues, industrialisation and green industrialisation),” he said.
He added that; “It has also undertaken an empirical analysis to assess the expected incidence on African economies of the different suggested options according to the two envisaged liberalization approaches.”