African countries have agreed to give more options to countries joining the Continental Free Trade Area when it comes to removal of duties on items critical for their economic progress.

At the fifth CFTA Negotiating Forum held in Addis Ababa last month, member states agreed to liberalise between 85 and 95 per cent of their tariff lines in a tiered manner over a decade.

“There is a need to have agreed criteria to determine what to include in the sensitive lists. If not, countries may exclude or have sensitive lists that target products of interest to others. Countries with more diversified economies tend to have more tariff lines for purposes of taxation and protection of their industries,” said EAC trade expert Peter Kiguta.

The EAC has around 5,000 tariff lines while South Africa and Egypt have over 7,000. 

“Developed countries can be mischievous by offering nothing new beyond the level they have opened under Regional Economic Communities (RECs) while they will enjoy more market access in less developed countries.  CFTA should have incremental value by opening market access more than is current in the RECs,” said Mr Kiguta.

David Luke, director of the African Trade Policy Centre at the Economic Commission for Africa (ECA) said trade liberalisation efforts must be balanced.

“In addition, to easing of procedures, the negotiators should address the rights to movement, work and food, and how people are to be made aware of these rights,” said Mr Luke.

African countries have set December 2017 as the deadline for completion of negotiations on the establishment of the CFTA even though more work remains. 
The pending issues to be negotiated under CFTA are trade and non-tariff barriers, sanitary and phytosanitary measures, rules of origin, trade in services and Customs procedures.

According to ECA, Africa spends $64 billion a year on food imports, with 20 per cent of intra-African trade stemming from agriculture. Since the bulk of African trade hinges largely on movement, any meaningful free trade agreement requires facilitating cross-border movement.

The CFTA aims to create a single continental market for goods and services, ensure free movement of business people and investments and expand intra-African trade. The CFTA is also expected to enhance competitiveness at the industry and enterprise levels on the continent. The CFTA has the potential to boost intra-African trade by 52.3 per cent between 2010 and 2022.

Trade in industrial products is expected to receive the largest boost, with an additional increase of 53.3 per cent over the same period. The African Union is currently developing a capacity building plan in accordance with the needs expressed by member states before rolling out activities.

Out of the amount secured so far from development partners, AU member states have contributed $3 million for 2016 and $4.9 million for the year 2017 towards the action plan.