The African Continental Free Trade Area (ACFTA) was launched on Sunday in Niamey, Niger, by the Heads of State and Government at an extraordinary summit of the African Union.
The Agreement entered into force on 30 May 2019, within 14 months after its signature on 21 March 2018 in Kigali. It was negotiated in just over two years.
This impetus towards closer economic integration is poised to change Africa forever. The entry into force of the ACFTA is a truly momentous event.
The irony is stark, that amidst current global trade wars, Africa is now the torchbearer of multilateralism and open economies.
However, African economic integration is developmental integration, designed to promote structural transformation, rather than being a traditional FTA obsessed primarily with market liberalisation.
ACFTA covers goods and services and has complementary programs for infrastructure, industrialization, agriculture modernization, small- scale trade, as well as innovation, intellectual property, competition and investment.
There has never been a better time to invest and trade in Africa. With a combined GDP of US$6.7 trillion in purchasing power parity, business and consumer spending at US$4 trillion, over 400 companies with revenues of over US$ 1 billion, 60 per cent of the world’s arable land and vast strategic minerals, Africa has truly taken off.
For African political, private sector and intellectual leadership, the call of duty now is to ensure that this trajectory is irreversible, and that decent jobs and incomes are equitably generated from increasing trade and investment.
Economic pan-Africanism has come of age. We now have a crop of economic pan-Africanists who have negotiated this Agreement in a record period of just two years, and then ensured it entered force in just over one year.
We should harness this crop and build a sustainable intergenerational institutional memory for Africa that will keep the impetus into the future. We must enhance capabilities to continuously make what seems impossible very easily possible.
Now is the time for the young to know what pan-Africanism means: I am not free until everyone is free. We must have the Africans We Want, in order to build the Africa We Want; that is, a free, prosperous and peaceful Africa.
This euphoria though must have the realism to galvanise the required immediate actions before the launch of ACFTA, if it is to work.
Before trade can actually happen under ACFTA, the following should be in place: trade documents, tariff schedules, rules of origin and a system for addressing non-tariff barriers.
Countries need to be able to issue and process especially the new ACFTA customs declarations and certificates of origin. And the private sector including the logistics industry needs to be familiar with and have confidence in these documents.
This is in addition to the universal trade documents, and product-specific regulatory documents, especially for agricultural and chemical products.
Tariff Schedules should be in place. Without them, one would not know the payable customs duties under ACFTA on the 5,000 or so tradable products.
Bilateral negotiation of tariff offers would be too complex and take an overly long time. Every Member State/customs territory should therefore just produce a Tariff Schedule without further delay, covering 90 per cent of the products on which the tariff phase down is to commence immediately.
In addition, the principle of acquis should be used. It means that the Member States in existing FTAs in the regional blocs do not have to re-negotiate anything anew among themselves. This should be harvested into ACFTA, on the basis of the agreed principle of preserving and building on the acquis.
The EAC-SACU tariff negotiations have been finalised within the COMESA-EAC-SADC Tripartite Arrangement. What has been agreed there can also be harvested into ACFTA, so that there are no new negotiations between EAC and SACU for the ACFTA Tariffs.
These two approaches – of producing Tariff Schedules indicating a phase down to zero percent customs duty over the relevant transition periods, and of harvesting the acquis – can produce Tariff Schedules in time for the implementation of the new continental agreement.
• This piece is authored by Francis Mangeni, Director of Trade and Customs at the COMESA Secretariat.
2019-07-12 09:24:37 11 days ago