Illegal charges, poor policies, complex processes pose setback to new continental trade regime
By Sulaimon Salau
The African Continental Free Trade Area (AfCFTA) will need to scale several hurdles for it to yield the anticipated progressive continental trade.
The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 percent by 2022, yet the implementation is yet to take full force.
With a successful implementation of this new trade initiative, there is potential for Africa’s manufacturing sector to double in size from $500 billion in 2015 to $1 trillion in 2025, creating about 14 million stable jobs.
Meanwhile, the United Nations Conference on Trade and Development (UNCTAD) in a new report titled: “Implications of the African Continental Free Trade Area for Trade and Biodiversity: Policy and Regulatory Recommendations”, stated that the new regime is facing some critical challenges which needed to be eliminated urgently.
It noted that unharmonized or burdensome non-tariff measures (NTMs) can dramatically restrict market entry, limiting the ability of countries to reap economic, social and environmental gains from trade in sustainably produced biodiversity-based goods and services.
NTMs are defined by UNCTAD as “policy measures other than ordinary customs tariffs that can potentially have an economic effect on international trade in goods, changing quantities traded, or prices or both”
UNCTAD therefore stressed the need for an identification exercise on key NTMs affecting biodiversity-based products and services, and BioTrade in particular, so that these may be addressed by novel mechanisms within the framework of the AfCFTA Agreement.
Also, it noted that the Intellectual Property Rights (IPRs) institutional and legal landscape in Africa is complex, and IPRs issues may be challenging to negotiate at a continental level.
“The provision of cross-border business and financial services is very complex in Africa and further analysis is also needed if countries aim to seize the development opportunities generated by the trade of legally and sustainably produced biodiversity-based products and services.
“Tariffs pose a significant obstacle to intra-African trade. Reducing them could have a range of positive and negative effects for different actors in different countries. For example, reducing tariffs will increase market access for producers in exporting countries. It will also expose producers in importing countries to more competition,” the report stated.
However, Nigeria and some other countries have continue to lag behind in the process to domesticate trade protocols in line with the implementation of the new trade regime.
The Nigerian Customs Service (NCS) had recently stated that AFCFTA would commence in Nigeria after the crucial criteria are completed, although, it stated the process is “currently at 81 per cent” completion.
Public Relations Officer, NSC, Deputy Controller, Joseph Attah, said the list of Nigeria tariff offers has been communicated to NCS from the national office for trade negotiation and the Economic Community of West African States (ECOWAS).
He said: “We have started the reconfiguration of the system to capture the AFCFTA procedures. The senior trade officials comprising of trade leaders in all African countries are still meeting to finalise the rules of origin criteria. Trade in AfCFTA will start after the crucial criteria are completed. Currently it is at 81percent,” he stated.
On 5 December 2020, the African Union Heads of States and Government decided to launch trade in goods under the African Continental Free Trade Area (AfCFTA), which took of on January 1, 2021.
The objective of the AfCFTA Protocol on trade in goods per art, is to boost intra-African trade in goods through: Progressive elimination of tariffs; progressive elimination of NTBs; enhanced efficiency of customs procedures, trade facilitation and transit.
Others are: enhanced cooperation in the areas of technical barriers to trade (TBT) and sanitary and phytosanitary measures (SPS); development and promotion of regional and continental value chains; and enhanced socio-economic development, diversification and industrialisation across Africa.
