With trading under the African Continental Free Trade Area (AfCFTA) agreement, expected to start January 1, 2021, officials and experts say, a lot of ground as regards outstanding negotiations and readying prerequisites to make things work has been covered.
The negotiators are still busy trying to wrap up before the beginning of trade.
Trading under the AfCFTA was due to commence on July 1, 2020. But due to the Covid-19 global pandemic, it was postponed. This gave countries some more time to patch up unfinished work. The negotiations proceeded using online platforms.
An Extraordinary AU Summit to be held on Saturday, December 5 "is expected to approve all required instruments to start trading” under the AfCFTA on January 1, the Minister for Trade and Industry, Soraya Hakuziyaremye, told The New Times.
"As Rwanda, we are very much looking forward to this milestone, two years and eight months after the signature of the AfCFTA agreement in Kigali,” she said.
"Despite Covid-19, the EAC has been able to conclude the first set of negotiations to allow the Customs Union to submit its schedule of tariff concessions before the Summit. This was approved on Wednesday (December 2) at the EAC Sectoral Council on Trade Industry Finance and Investments.”
Prudence Sebahizi, Chief Technical Advisor on AfCFTA at the AU Commission, told The New Times that "much progress has been made” to ensure that trading starts on January 1.
Sebahizi said: "Member States have been able to conclude outstanding negotiations on rules of origin to the level above 80% and tariff offers have been submitted to allow trade in goods to start.
"With respect to tariff concessions on trade in goods, seven countries and three Customs Unions (CEMAC, ECOWAS plus Mauritania and SACU) – giving a total of 34 state parties - have submitted their initial tariff offers.”
Sebahizi said that 12 member states and one Customs Union (ECOWAS plus Mauritania) have submitted their initial offers on trade in services, making a total of 28 member states. The EAC also submitted its tariff offers on Thursday.
In addition, the AfCFTA online mechanism for the reporting, monitoring and elimination of non-tariff barriers (NTBs) in Niamey, Niger, is now operational. The training of NTB Focal Points of 42 member states has also been carried out.
"The remaining countries will be offered training upon request. Sensitization of the private sector on this AfCFTA NTB reporting facility has also been carried out,” Sebahizi said.
The main objectives of the AfCFTA are to, among others, create a single continental market for goods and services, with free movement of business persons and investments, and therefore pave way for accelerating the establishment of the Customs Union.
Prerequisites
To start trading under the AfCFTA, there are preconditions or prerequisites that must be in place, namely, a AfCFTA Trade Regime comprising: tariff schedules, rules of origin, as well as Trade and Customs documents under which products can move across the countries in the AfCFTA, "as exports, imports or in transit,” said Dr Francis Mangeni, former Director of Trade Customs and Monetary Affairs of COMESA.
Tariff schedules indicate on which products customs duties and other trade restrictions have been removed or reduced. Rules of origin set out the conditions that must be met in producing those products if they are to qualify for the duty-free and other preferential treatment.
Mangeni, now a private consultant and advisor on transformation and international development, noted that Trade and Customs documents include the AfCFTA Certificate of Origin and the AfCFTA Customs Declaration, in addition to other universal documents as well as documents for regulated products like plants, animals, chemicals, and foodstuffs.
"All border agencies - customs, immigration, standards, security, and others - must be aware and on duty as facilitators of Trade under the AfCFTA,” Mangeni said.
According to Louis Yaw Afful, Executive Director of the AfCFTA policy network, before January 2021, there must be awareness amongst the regulatory authorities, including the Customs, Standards and Immigration authorities, and many other stakeholders.
"There must be awareness among the economic populations including producers, exporters, importers, the logistics industry and trade support institutions. There must be Customs automation; update the customs systems to interconnect all state parties,” Afful said.
Also important, he noted, are tariff schedules covering at least 90 per cent of the tariff lines on the basis of harmonising the system for commodity coding and discretion.
"And at least every country should have a national committee and a focal point for addressing non-tariff barriers in accordance with the online system at the www.tradebariers.africa,” said the Executive Director of the AfCFTA policy network.
In Kigali, Hakuziyaremye stressed the importance of the ongoing coordination between government institutions - Ministries of Trade, Foreign Affairs, and agencies such RRA, NAEB, and others - and Rwanda’s private sector in the joint team participating in the negotiations at EAC and AU level.
"The Government is also working on a national strategy for AfCFTA in partnership with UNECA which will guide us and the business community on how to fully tap in the opportunities offered by the continental market,” she said.
"Rwanda is ready to be among the first countries that will start trading under AfCFTA on January 1.”
As a step forward in the practical implementation of the AfCFTA, the Economic Commission for Africa recently launched an online trading platform - the African Trade Exchange (Atex) - that will facilitate trading between buyers and suppliers when the agreement starts.
Solange Nisingizwe, a Rwandan entrepreneur involved in the textile and logistics sector, is eagerly awaiting the start of trading on January 1.
She, among other things, teamed up with other entrepreneurs and they are now developing an online platform, cuumba.com, which they intend to invite others to use for export promotion.
"This idea came from our experience during this Covid-19 pandemic period when things came to a standstill. We are creating a complete supply chain and we shall manage the logistics such that commodities reach the client just as with Alibaba, Amazon or other such platforms,” Nisingizwe said.
One of the major lessons during this Covid-19 pandemic is the importance of having credible supply chains.
"We are planning it such that when trading starts under the AfCFTA, we also trade on the continental market. We, of course, shall start at home, Rwanda, and EAC, but our eye is on Africa.”
Job is by no means over
Presently, 54 out of the 55 AU member states have signed the Agreement and 34 have so far deposited their instruments of ratification.
From Accra, Ziad Hamoui, the national president of the Borderless Alliance in Ghana, told The New Times that earlier than the January 1 timeline, there is "the deadline of December 5 for the submission of ratifications, which countries are also rushing to beat.”
Nigeria deposited on December 1.
"Much as we are proud of the progress that has been made, the job is by no means over,” Sebahizi cautioned.
He explained that work will continue so that the 90% threshold as set out in the modalities is reached in terms of tariff offers for trade in goods presented and the corresponding rules of origin.
"This will be part of ongoing work under the built-in agenda and will also include work on schedules of specific commitments and regulatory frameworks on trade in services,” Sebahizi said.
Hamoui said that, personally, as a private sector person, or as the representative of an advocacy group, "I am still worried about the lack of updates from the negotiators about where they are on sensitive issues such as rule of origin, schedules of tariff concessions and schedules of special commitments.”
The Borderless Alliance, which he heads in Ghana, is a private sector-led regional advocacy group which promotes economic integration and the free movement of goods and people across West Africa.
"I am anxious to hear an update on the upcoming AfCFTA Business Forum on December 4. I hope it’s not too late to make any amendments by then, though.”