Rwanda has been picked among countries set to start trading under the African Continental Free Trade Area (AfCFTA) framework in a pilot phase that also involves six other countries.

The move seeks to test the environmental, legal and trade policy basis for intra-African trade, according to the Ghana-based AfCFTA secretariat.

Countries picked to participate in what’s known as the AfCFTA Initiative on Guided Trade were announced during the 9th meeting of the AfCFTA Council of Ministers in the Ghanaian capital of Accra on Monday, July 25.

The other pilot countries include Cameroon, Egypt, Ghana, Kenya, Mauritius and Tanzania. 

The seven countries were selected from 36 countries that had expressed interest in trading under the pilot phase. Each of the applicants had submitted its tariff schedule. 

According to the AfCFTA Secretariat, the initiative seeks to demonstrate that AfCFTA is functioning and send a political message to countries that are yet to submit their provisional schedules of tariff concessions in accordance with agreed modalities. 

The initiative will identify companies, products, customs procedures, and logistics processes required to enable trade to happen under the AfCFTA, officials said. 

Antoine Kajangwe, Director General of Trade and Investment at the Ministry of Trade and Industry, said Rwanda will now begin to access markets in west and central Africa on preferential rates, with a reduction in duties having begun in 2021. 

"Over time, this will increase Rwanda’s intra-African exports, spur industrialisation through economies of scale, increase employment in productive jobs, and lead to structural transformation of Rwanda’s economy,” he said. 

Western African countries such as Ghana, Senegal, Nigeria, Chad, and Benin are said to present great potential for trade and investment for Rwanda’s private sector. 

Rwanda will trade identified products across agro-processing, manufacturing and construction materials. These include pesticides; insecticides; telephones; textiles; processed foods such as flour, milk, cheeses, vegetables, and other horticulture products, Kajangwe said.

"We will be working with the private sector to encourage many economic players to take advantage of this initiative and trade,” he added. 

According to the AfCFTA modalities, 90 per cent tariff offer fall under category A, which covers products that were liberalised in 2021. This will progressively be reduced over 10 years.

Seven per cent get liberalised over 15 years while three per cent of products are excluded from tax exemption. 

Kajangwe noted that Rwanda had reached this threshold and it was technically verified by the AfCFTA Secretariat.

Recently, the Economic Commission for Africa (ECA) launched a comprehensive tool that measures how easy, or hard, it is to do business between African countries.

Known as the AfCFTA Country Business Index (ACBI), it is expected to assess the perceived impact of the continental trade area on the private sector’s ability to trade and invest across African borders once the free-trade framework is operational. 

AfCFTA, the largest free trade zone in the world, covers 54 African countries, 43 of which have already ratified the agreement, with 39 state parties officially recognised, including Rwanda.

The landmark agreement, signed in Kigali in March 2018, envisions a continental market of 1.2 billion people, with a combined Gross Domestic Product of more than $3.4 trillion.