The American Business Council, Nigeria, in collaboration with the American Chamber of Commerce, Ghana, hosted a webinar to discuss AfCFTA Implementation Post Covid-19 with the Secretary-General of the African Continental Free Trade Area Secretariat, Wamkele Mene.
AfCFTA provides the opportunity for Africa to create the world’s largest free trade area, with the potential to unite 1.3 billion people, in a $2.5 trillion economic bloc and usher in a new era of development.
The main objectives of the AfCFTA are to create a continental market for goods and services, with free movement of people and capital, and pave the way for creating a Customs Union.
Wamkele Mene briefly described the origin of the AfCFTA, which is essentially the product of the AU’s 2012 Boosting Intra -Africa Trade Action Plan which currently is at 18%.
He conceded that tariffs alone are not enough to encourage trade within Africa; this has to be done in conjunction with re-examining the economic structure of Africa; Leveraging on regional value chains; improving infrastructure, which currently at a deficit of about 100 billion U.S dollars and producing more goods or adding value to raw material.
With regard to the operationalization of the Secretariat and the agreement, Mene explained that the July 1st start date for trading has been put on hold until the pandemic is under control. 51 Countries have signed unto the Agreement and 28 Countries have so far ratified it as State parties.
Key Aspects of the Agreement Includes;
- Increase and encourage the production of goods/services and the establishment of regional value chains to benefit all Countries on the Continent, create jobs and lift people out of poverty
- Harmonization of customs processes and procedures on the Continent, to create a respected rule-based system for Countries to comply
- Implement rules of origin
- Implement a dispute settlement mechanism
Medium-Term Objectives of the Secretariat
- Establishment of the Secretariat and staffed with the best and brightest Africans
- World-class implementation of the Agreement
- Credible dispute settlement mechanism for fair, impartial, transparent, and non-partisan of disputes to enhance investor confidence.
- Establishment of value chains in two or three areas namely; automobile or agro-processing or the labour intensive value chains on the Continent
- Encourage young Africans and Women in business and trade
- Industrial Development Forum
- Establishment of Fund for Investment in Value Chain
The long term goal of the secretariat is to increase intra-African trade from the current 18% to over 50% by 2030.
Wamkele Mene cautioned against willful lack of compliance with the rules by Member Countries as one of the challenges that may impede the development of AfCFTA. He further encouraged Countries to see the implementation of the Agreement as the economic relief required to derive economic growth after the coronavirus pandemic.
