Govt, business consult on Africawide FTA
10 October 2018
By Mthandazo Nyoni
Government has opened consultations with industry on rules of origin (RoO) for the ambitious African Continental Free Trade Area (AfCFTA) aimed at promoting duty-free flow of goods and services originating in the bloc.
The consultations, which are being convened by the Ministry of Industry and Commerce, commenced yesterday and will end on Friday.
The Confederation of Zimbabwe Industries and the Zimbabwe National Chamber of Commerce are the main business member organisations participating in the engagement.
“As you may be aware, negotiations on RoO to be applied under the African Continental Free Trade Area are still ongoing,” Industry secretary Mavis Sibanda said in a letter to CZI and ZNCC dated October 5.
“The African Union Commission has submitted a template to member states to be used as a working paper for national consultations after which firm decisions will be taken during negotiations at the continental level.”
Through the consultations, the Ministry of Industry and Commerce wishes to elicit the “comments, suggestions, proposals and inputs” of industry, together with sector positions and their justifications, which would help shape the country position on AfCFTA RoOs.
The negotiations will progress to an intergovernmental level at three levels of engagement, namely technical, ministerial and Heads of State, before a final and binding framework is passed.
The AfCFTA will open a large market for local businesses with an estimated combined gross domestic product of over $3 trillion.
By 2030, the market size of the envisaged FTA is expected to comprise 1,7 billion people, with over $6,7 trillion of aggregate consumer and business spending.
The agreement to establish the AfCFTA was adopted in March this year.
The concept of a continent-wide FTA was first mooted in 2009 to expedite the regional and continental integration as well as resolving the challenge of multiple and overlapping memberships to regional economic communities.
Zimbabwe, for instance, is a member of two FTAs, Southern African Development Community and Common Market for Eastern and Southern Africa, both of which aim to become customs unions.
However, a country cannot sign up to more than one customs union.
The rationale behind the AfCFTA was to deepen intra-African trade, currently overly low as a majority of African countries trade in homogenous primary commodities or low-value manufacturers.
It is hoped that greater trade would stimulate value-added investments, production and trade.
The ambitious programme, however, faces challenges related to high informal cross-border trade and member States’ high dependence on import duties for fiscal revenue.