Delay on tariff offers to affect AfCFTA implementation
The Citizen | 26th January 2024
By Zephania Ubwani
Full implementation of the African Continental Free Trade Area (AfCFTA) could be delayed further due to the failure of some countries to act decisively on its key pillars.
Several state parties to the agreement are yet to finalise matters about the tariff offers and rules of origin. Others have been reluctant to swiftly work on equally important dispute resolution issues, intellectual property rights and services.
“To enable meaningful and real trade, tariffs need to be tackled between the partner states,” said Ms Elizabeth Thande, the chairperson of the East African Women-in-Business Platform (EAWiBP).
She was speaking in Nairobi during a capacity-building workshop for women entrepreneurs from the East African Community (EAC) region. AfCFTA, which came into force in January 2021, she said, provides for reduced and/or elimination of trade barriers, both tariff and non-tariff.
Trade facilitation, which complies with the necessary regulatory measures, and cooperation in customs unions are also part of the pact. For trade-in services, the agreement will facilitate the movement of services, including businesspersons.
Here, the member states have to finalise the schedules of specific commitments in the five priority service sectors: business, communications, finance, tourism and transport. It is expected that the implementation of the AfCFTA will increase investments and Foreign Direct Investment (FDI) on the continent.
African countries will need to invest in hard and soft infrastructure, specifically in transportation and logistics supply chains. This would allow for improved and mass volumes of cross-border trade, which would, in turn, require the building of solid distribution networks for the same.
She challenged the EAC states to roll out full implementation of the continental trade pact to promote intra-African trade, which currently stands at 17 percent.
Currently, Ms Thande told the entrepreneurs in the Kenyan capital that Africa accounts for only about two percent of global trade.
Only 17 percent of African exports are intra-continental, she explained, noting that the trade pact (AfCFTA) “aims to give a major boost to these figures.”
The workshop is intended to sensitise small and medium enterprises (SMEs) and women-in-business on the AfCFTA protocols and their relevance to business in the EAC.
It has been organised by EAWiBP, an Arusha-based body, with the support of GIZ EAC under the Support to East African Integration programme (SEAMPEC II).
“The support demonstrates the GIZ commitment to enhance the capacity of the EAC private sector to take advantage of the opportunities presented by liberalised trade in Africa under the AfCFTA arrangement,” she said.
However, she expressed her worries about the implementation timeline for the trade pact, saying it could take some time since member states are yet to finalise “different aspects of the agreement.”
These, she went on, include dispute settlement, tariff offers, rules of origin, services and intellectual property rights, among others.
Ms Thande said EAWiBP has embarked on training programmes on AfCFTA protocols to enable SMEs to enjoy access to new markets and a larger customer pool.
The SMEs are also expected to import raw materials and semi-processed goods from other African countries at a more affordable rate and cost, thus reducing the cost of production.
“These benefits will encourage them to improve their outputs, driving them to innovate better products and services,” she pointed out. To ensure effective implementation of the AfCFTA, the private sector apex bodies will be required to build the capacity of their members and prepare them to trade under the arrangement.
EAWiBP chief executive officer Janice Kimaro underscored the collaborative effort between the platform and GIZ as a strategic partnership set to benefit women in business.
According to her, the workshop marked a significant milestone in the empowerment of women in the EAC region involved in regional and continental trade.
Ms Kimaro extended her gratitude to EAWiBP and GIZ EAC for their unwavering support, emphasising a shared vision to advance economic opportunities and empower women in trade under the AfCFTA. “This partnership with GIZ-SEAMPEC II is a testament to our shared commitment to empowering women in trade under the AfCFTA.
“It opens avenues for growth, learning and strategising that will undoubtedly shape the future of women-led businesses in our region,” she said.
Other speakers at the gathering included Ms Waithira Mondo, the secretary of Moringa Value Chain Kenya Limited (MOVACK), a platform for women entrepreneurs in Kenya.