Africa must fix its infrastructure, harmonise rules of origin, taxes and immigration laws, and put in place a payment system to stimulate intra trade in the region.
These were part of the resolutions of the second ministerial retreat of the Council of Ministers on the African Continental Free Trade Area (AfCFTA) that was held from May 29-31 in Nairobi.
The meeting themed “The role of the private sector in the implementation of the AfCFTA: Own and drive AfCFTA,” sought to consider vital aspects of AfCFTA’s progress and highlight private sector participation.
The meeting also called on the elimination of travel visas, poor immigration and Customs laws, resolved to remove trade barriers that have seen intra trade grow at a paltry 17 percent on the continent.
“I call on the unity of the African nations to ensure autonomy in all sectors by strengthening Africa’s production capacity not only to avoid supply insufficiencies but also to add value to primary resources,” said President Azali Assoumani of the Union of Comoros, and chairperson of the AU Assembly of heads of state and government.
AfCFTA secretary general Wamkele Mene was concerned that despite marking the fourth anniversary in May, since the agreement entered into force, there were still major pending issues that needed to be done to fully implement the AfCFTA.
“Some of these issues are the Outstanding Rules of Origin on Automotive and Textiles Sectors, allocations of the adjustment facility according to countries’ estimated tariff revenue losses,” he said.
“Also, strategies for frontloading liberalization of trade in basic agricultural products in order to cope with food insecurity on our continent; updates on the Guided Trade Initiative and on Customs, trade facilitation and transit in AfCFTA.”
The AfCFTA Council of Ministers chairperson and Gabon’s Trade Minister Yves Fernand Manfoumbi, who was represented by first vice chairperson, Burundi’s Trade Minister Marie Chantal Nijimbere urged the private sector to push for further implementation of the AfCFTA protocols.
“No one can ignore the role played by the private sector especially as the key driver of industrialisation and trade, by improving and keeping strong and adaptive to private sector,” said Ms Nijimbere.
During the two-day conference, Kenya’s President William Ruto called on African partner states to fix infrastructure development as a key enabler to intra trade which currently is very low.
“Intra-Africa trade is remarkably low, at 17percent compared to 40 percent in Asia, 60 percent in the US and 70 percent in Europe.
Although Africa has been a net importer of agricultural commodities since 2,000, 81percent of these imports come from outside Africa, while 78 percent of its exports are destined for the rest of the world,” said Ruto.
“A major enabler of continental economic take-off requiring considerable investment is infrastructure. Low infrastructural connectivity is a serious impediment of our ambitions to realize Africa’s full trade and economic growth potential.”
He said the dialogue provided the perfect occasion to align government and private sector complementarity with the colossal demand for port, rail, road and air transportation, power and energy, as well as information, communication and technology infrastructure.
“And here is the infrastructure demand in context: Lack of efficient transport networks increases the price of goods traded among African countries by 30percent to 40 percent, rendering Africa effectively uncompetitive.”
The call to construct roads, eliminate cumbersome customs and immigration procedures at the border crossing points, removal of visa and work permits follows revelations that it took more than 3 months to transport Kenya’s coffee and tea and batteries to Ghana under the AfCFTA Guided Trade Initiative.
Kenya and Rwanda are among East African countries that plan to remove visa requirements for African nationals travelling for business as a first major step to remove barriers to intra-Africa trade.
In order to unlock trade, the meeting also called for the speeding up of the establishment of a common payment and settlement system to support trade between African countries.
President Ruto asked the AfCFTA to explore ways of paying in local currencies as opposed to the use of dollars which he said was stalling trade.
“Payment providers can plug directly into it to ensure instant payment in local currencies to reduce or eliminate the challenges of cross-border payment,” he stated.