January 1, 2021

AfCFTA Adoption Will be Slow as Many Nations Lack Border Facilities


Trustworthy and indepth news stories are more important now than ever.
Support our newsroom by MAKING A CONTRIBUTION HERE
The main border between Tanzania and Rwanda. Tanzania’s Dar es Salaam port is where more than 80% of Rwanda’s import enter as relations with Uganda remain shaky. But Tanzania has not ratify the AfCFTA

Most African countries are not ready to implement the terms of the African Continental Free Trade Area as the new zone comes into effect today January 1, 2021, according to the head of the trade bloc’s secretariat.

Fifty four African nations have committed to join AfCFTA but of the 34 countries to have ratified the agreement so far many lack the customs procedures and infrastructure to facilitate tariff-free trade, said Wamkele Mene, secretary-general of the AfCFTA secretariat.

“It’s going to take us a very long time,” said Mr Mene, a South African trade expert elected by the African Union last year in February. “If you don’t have the roads, if you don’t have the right equipment for customs authorities at the border to facilitate the fast and efficient transit of goods . . . if you don’t have the infrastructure, both hard and soft, it reduces the meaningfulness of this agreement.”

Mr Mene insisted that the free trade area, which covers a population of 1.2bn and countries with combined output of $2.6tn, could still be transformative.

“We want to move Africa away from this colonial economic model of perpetually being an exporter of primary commodities for processing elsewhere,” he said. “We want to stop approaching tariffs as a tool for revenue. We want tariffs to be a tool for industrial development.”

In 2019, 14.4 per cent of official African exports went to other African countries, a small proportion compared with the 52 per cent in intra-Asian trade and 73 per cent between European nations in the same year, according to Afreximbank, a Cairo-based multilateral trade finance institution.

An UNCTAD report shows that African countries could gain US$20 billion each year by tackling such barriers at the continental level – much more than the $3.6 billion they could pick up by eliminating tariffs.

The agreement requires member countries to remove tariffs on 90% of goods. But negotiators realized that non-tariff barriers must also be addressed and called for a reporting, monitoring and elimination mechanism.

David Luke, who co-ordinates trade policy at the UN Economic Commission for Africa, said that goods traded within Africa were more processed than the raw materials exported from the continent to China, India, Europe and other major trading partners.

“Policymakers have understood that, although trade on the continent is limited, this is value-added trade,” he said. “This is where the jobs are coming from, as opposed to trade with the rest of the world, which is mostly commodities.”

Trade experts said the single market also offered investors potential economies of scale, enabling them, in theory, to manufacture goods in one country and export them tariff-free to the whole continent. Jeffrey Peprah, chief executive of Volkswagen, Ghana, said he hoped eventually to export cars assembled in Accra to other west African countries.

Mr Mene warned it might take years to bring countries’ laws into line with new requirements. Ethiopia, for example, prohibited foreign investment in its financial sector, a potential breach of AfCTFA rules, he said

As a result, the secretariat could see a flurry of legal challenges from countries on behalf of their corporations, he said. “I’m not saying countries must rush to dispute settlement. All I’m saying is that, if they do, the jurisprudence will bring clarity to the body of trade law that we’ve developed in the form of this agreement.”

For the agreement to work, one western diplomat told The Wall Street Journal that the free trade zone must benefit producers in smaller, poorer countries as well as those in more industrialised parts of the continent. Many countries saw the free trade area as a way of boosting their exports but few had embraced the corollary that they would need to import more, the diplomat said.

Mr Mene said the secretariat was working with Afreximbank to establish a pan-African trading platform to allow smaller enterprises to trade effectively across borders and in different currencies. “Often in trade agreements the big winners are the already industrialised countries and the big corporations who can access the new markets literally overnight,” he said.

If AfCFTA created too many losers and not enough winners, Mr Mene said, there could be a similar backlash against free trade as had occurred in the US and parts of Europe. Then Africans too would conclude, he said, that “these trade agreements don’t work”.

As at 5 December 2020, 34 countries had deposited their instruments of ratification, according to Tralac, a regional trade policy monitoring group.

They are: Ghana, Kenya, Rwanda, Niger, Chad, Eswatini, Guinea, Côte d’Ivoire, Mali, Namibia, South Africa, Congo, Rep., Djibouti, Mauritania, Uganda, Senegal, Togo, Egypt, Ethiopia, Gambia, Sahrawi Arab Democratic Rep., Sierra Leone, Zimbabwe, Burkina Faso, São Tomé & Príncipe, Equatorial Guinea, Gabon, Mauritius, Central African Rep., Angola, Lesotho, Tunisia, Cameroon and Nigeria.

So far, it leaves only 20 countries yet to ratify the treaty. They are Benin, Botswana, Burundi, Cape Verde, Central African Republic, Comoros, Democratic Republic of the Congo, Guinea-Bissau, Liberia, Libya, Madagascar, Malawi, Morocco, Mozambique, Seychelles, Somalia, South Sudan, Sudan, Tanzania and Zambia.

In the East African Community region, only Rwanda, Uganda and Kenya, while Tanzani and Burundi have remained adamant to ratify largely due to geopolitical reasons.

Rwanda and Uganda’s neighbor DR Congo is in the mechanism, but it remains to be seen how the vast DRC border will be policed.

Adapted from The Wall Street Journal

We can't do quality journalism without your support

Perhaps it goes without saying — but producing quality journalism isn't cheap. At a time when newsroom resources and revenue are declining, The Chronicles remains committed to "Serving Your Right To Know The Truth". Stand with us as we document Rwanda's remarkable journey for you and the future generation. Do you value our journalism? We can't do it without you. Show us with your support by CONTRIBUTING HERE.
Email your news TIPS to info@chronicles.rw or WhatsApp +250788351327.
You can also find us on Signal

417 Comments

  1. Thanks , I have just been searching for info about this subject for ages and yours is
    the greatest I’ve found out till now. But, what concerning the conclusion? Are you positive in regards
    to the supply?

  2. Good post. I learn something new and challenging on sites I
    stumbleupon every day. It’s always helpful to read
    content from other authors and use a little something from other websites.

  3. Hey there just wanted to give you a brief heads up and let you know a few of the images aren’t loading
    properly. I’m not sure why but I think its a linking issue.
    I’ve tried it in two different internet browsers and both show the same results.

  4. I’ve been exploring for a little bit for any high-quality articles or weblog posts
    in this kind of area . Exploring in Yahoo I ultimately stumbled upon this web site.
    Reading this info So i’m satisfied to express that I have an incredibly just right uncanny feeling I discovered
    just what I needed. I most certainly will make certain to don?t overlook
    this website and provides it a look regularly.

  5. Thanks for ones marvelous posting! I genuinely enjoyed
    reading it, you’re a great author. I will be sure to bookmark your blog
    and will come back later in life. I want to encourage you to continue your great posts, have a
    nice day!

  6. Howdy! I realize this is sort of off-topic but I had to ask.
    Does running a well-established blog like yours take a large amount
    of work? I am completely new to operating a blog however
    I do write in my journal on a daily basis. I’d like
    to start a blog so I will be able to share my personal experience and thoughts online.
    Please let me know if you have any ideas or tips for new aspiring bloggers.
    Thankyou!

  7. I’m more than happy to uncover this page. I wanted to thank
    you for ones time for this particularly fantastic read!!
    I definitely liked every little bit of it and i also have you saved as a favorite
    to see new stuff on your site.

  8. Spot on with this write-up, I honestly feel this site needs far
    more attention. I’ll probably be back again to read through more,
    thanks for the information!

  9. I was wondering if you ever thought of changing the page layout of your blog?
    Its very well written; I love what youve got to say.
    But maybe you could a little more in the way of content so people could connect with it
    better. Youve got an awful lot of text for only having 1 or 2 images.

    Maybe you could space it out better?

  10. My spouse and I stumbled over here coming
    from a different web page and thought I should check things out.
    I like what I see so now i’m following you. Look forward to looking into your web page
    for a second time.

  11. Hello there, just became aware of your blog through Google, and found that it is really informative.

    I am gonna watch out for brussels. I will be grateful if you continue this in future.
    Many people will be benefited from your writing. Cheers!

  12. Scramble Words is a free online word scramble game, with many exciting twists and turns!\r\n\r\nScramble Words is a word-making game. The goal is to unscramble the list of letters found at the bottom of the screen, using your keyboard or mouse to spell out words. As you’re unscrambling, keep in mind that scoring —the goal of the game — is based on the length of the words you spell, the difficulty of the letters used, and how quickly you find and spell each word. Up the difficulty and you’ll be rewarded handsomely! Phone can’t handle the latest games? Old PC just ain’t up to snuff when it comes to running the most intense apps? With now.gg, you can play games online for free without having to deal with long downloads and countless updates. Transform your old devices into advanced gaming machines in an instant with now.gg!
    https://headsupmarketingpromotion.com/2013/10/a-look-inside-the-protein-bar/
    It’s like regular tag, but with water balloons! Whoever is “it” carries the water balloon. They try to hit other players with the water balloons. If you get hit and the balloon breaks then, you’re it! It is an interesting balloon pop game and needs to be played by many kids. Ask all the kids to write their names on the balloons and then, throw the balloons onto the floor and mix them up. Set a timer and let them stomp and pop the balloons. The kids whose name remain unpopped gets to play another round. Balloon and a laundry basket These balloon party games and water balloon games are sure to be a hit at your next birthday celebration! I hope these activities and games with balloons help you plan the most epic fun at your next kids’ party!

  13. Wow, fantastic blog format! How lengthy have you ever been blogging for?
    you made running a blog look easy. The overall glance of your website
    is magnificent, let alone the content material! You can see similar here sklep internetowy

Leave a Reply

Your email address will not be published. Required fields are marked *