African leaders on Saturday, December 5, underscored the urgent need for African Union member states to kick-start trading activities, under the African Continental Free Trade Area (AfCFTA). The decision was adopted during an extraordinary AU virtual meeting on the AfCFTA, held under the Chairmanship of South African President Cyril Ramaphosa, to consider the adoption of the legal instruments that will facilitate its operation. Trading under the AfCFTA is scheduled to commence on January 1, 2021. Ramaphosa who is also the Chairperson of the African Union (AU) said: “Today we stand on the cusp of a new era in the progress of our continent. The moment that we have all been working painstakingly towards has finally arrived. We are all filled with a great sense of pride at how far we have come to reach this moment. We are about to witness the realisation of one of the flagship projects of Agenda 2063.” Commencement of trading under the AfCFTA on January 1, the AU Chairperson said, is one of the most significant milestones in the continental integration project, and it is going to be the clearest affirmation that Africa is determined to take charge of its own destiny. Key decisions Among the key decisions made Saturday was the decision to go ahead with the agreed rules of origin as we have to start somewhere, Stephen Karingi, the Economic Commission for Africa’s (ECA) Director for Regional Integration and Trade, told The New Times. Karingi also liked the decision to bring coherence in the leadership of negotiations and implementation going forward under the Council of Ministers of the AfCFTA. The decision to accelerate the e-commerce negotiations in parallel with phase II is critical for early harvest of AfCFTA for youth and small businesses, he noted. Lastly, the leaders were in one accord that a Protocol on Women in Trade in Africa is a good action. December 2021 deadline President Paul Kagame commended African Ministers of Trade, the African Union Commission, and the AfCFTA Secretariat, for successfully overseeing the technical negotiations. “The remaining negotiations should be completed as soon as possible in order to maximise the benefits of higher trade volumes for all of us,” Kagame said. According to Karingi, the decision to have December 2021 as the common deadline for phase II and phase III negotiations shows the commitment to realize and lock in the e-commerce benefits early. Phase II entails negotiations on investment policy, competition policy and intellectual property rights. Karingi said: An expeditious conclusion of phase II and III (negotiations) of the AfCFTA will ensure the decision to start trading under the agreement yields maximum and inclusive benefits for all in Africa. He explained that with the digitalisation, which has been accelerated by Covid-19 as African countries have responded to its challenges, it is clear that the earlier the rules are agreed on digital trade under the AfCFTA, the better. Furthermore, the four issues are connected and interrelated, and are critical to supporting the investments necessary for producing and trading across the continent, Karingi said. Moussa Faki Mahamat, Chairperson of the AU Commission, expressed satisfaction on the milestone achieved in the implementation of the AfCFTA. Moussa Faki noted that, for this dream to finally become a reality, this continental project had to go through several stages. First was the signing in 1991 of the Treaty establishing the African Economic Community, followed by the signing in March 2018 in Kigali, Rwanda, of the Agreement establishing the AfCFTA, during which 44 countries signed the Agreement. It is with great satisfaction, he said, that in record time 34 countries have ratified the legal instrument on the AfCFTA. The Secretary General of AfCFTA, Wamkele Mene, stressed that integrating 55 markets will not be easy but giving up is not an option. In August, Ghana officially handed over the AfCFTA Secretariat building to the AU. President Akufo-Addo of Ghana has given his full support and is committed to see the AfCFTA truly commercially start off trading by January 1. Today, 54 countries have signed the agreement while 34 others deposited their instruments of ratification, and 41 countries or customs unions submitted their tariff offers, including the EAC and ECOWAS. Wemkele called on member states to aggressively implement the AfCFTA as one of the tools for effecting a fundamental structural transformation of Africa’s economy and placing Africa on a path of long term industrial development. He said: Women in trade, young Africans and SMEs, confront significant challenges when attempting to benefit from trade agreements.” For the AfCFTA to be inclusive and to ensure shared growth across the continent; women, young Africans and SMEs have to be at the heart of its implementation, he stressed. The just concluded 13th Extraordinary Summit was meant to approve all instruments required for the start of trading under the AfCFTA. The leaders endorsed the report presented by President Issoufou Mahamadou of Niger, who is the leader and Champion of the AfCFTA and requested him to ensure that all 55 AU countries become state parties to the Agreement. The Assembly also deliberated that the exchange of tariff concessions between state parties will be conditioned by the principle of reciprocity in terms of product line coverage, and tariff reduction schedules aligned with the agreed modalities. The principle of reciprocity means that state parties to the AfCFTA shall grant each other mutually agreed tariff concessions, Prudence Sebahizi, Chief Technical Advisor on AfCFTA at the AU Commission, told The New Times. If, for example, the EAC has submitted its tariff offers and SACU has submitted its offers, the two customs unions can trade amongst each other. However, he said, a country like Eritrea cannot benefit from preferences in the EAC market, nor can EAC partner states export to Eritrea on AfCFTA preferential terms. Presently, 54 out of the 55 AU member states - save for Eritrea - have signed the Agreement.
