Roundup: More work needed for effective implementation of African free trade area: experts

Source: Xinhua| 2019-05-21 00:32:06|Editor: yan
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by James Gashumba, Frank Kanyesigye and Lyu Tianran

KIGALI, May 20 (Xinhua) -- Issues like negotiations on key instruments and more ratification numbers have to be achieved for effective implementation of the African Continental Free Trade Area (AfCFTA) Agreement, Rwandan experts told Xinhua recently, as the African Union (AU) Commission set a time frame to activate the AfCFTA agreement on May 30.

According to the AU, the remaining work for the AfCFTA is for the AU and African ministers of trade to finalize work on supporting instruments to facilitate the launch of the operational phase of the AfCFTA during an extra-ordinary heads of state and government summit on July 7.

These instruments include rules of origin, schedules of tariff concessions on trade in goods, online non-tariff barriers monitoring and elimination mechanism, digital payments and settlement platform and African Trade Observatory Portal.

Permanent Secretary of Rwanda's Ministry of Trade and Industry Michel Minega Sebera said the implementation can't be effective before negotiations on some key implementing instruments, including rules of origin and tariff concessions are completed.

Despite the fact that the required 22 ratifications for the AfCFTA agreement to enter into force have been reached, the rest of African countries should join for its effective implementation, said Sebera, who is also an expert in international trade and development industry.

Nigeria, Africa's largest economy, has so far opted not to ratify the agreement.

Over 50 percent of the continent's cumulative GDP are contributed by Egypt, Nigeria and South Africa, while Africa's six sovereign island nations collectively contribute just 1 percent, according to reports.

African countries are at different levels of development and may also have different understanding of the AfCFTA objectives, Sebera said.

He also said awareness and sensitization of stakeholders should be a continuous activity before and during the implementation process.

The private sector and business community have to play a key role in the implementation process, whose proper understanding and contribution are very important to the implementation, the official said.

Strong governments are necessary to ensure the implementation, said Enock Twinoburyo, Senior Economist at the Sustainable Development Goals Center for Africa based in Kigali, capital city of Rwanda, noting that political challenges or political pressures in different countries lately will affect the implementation.

Poor infrastructure, non-tariff barriers to protect local industries and funding constraints for transition of the AfCFTA could also affect the implementation of the AfCFTA, said Twinoburyo.

The AfCFTA is regarded as the world's largest free trade zone by the number of countries, covering more than 1.2 billion people, with a combined gross domestic product (GDP) of 2.5 trillion U.S. dollars.

Once operational, the African free trade accord is also projected to boost the level of intra-Africa trade by more than 52 percent by the year 2020, according to the United Nations Economic Commission for Africa.

The AfCTA will most likely attract a large amount foreign direct investment, and the trade of Africa with the rest of the world is expected to go up, said Herman Musahara, associate professor and researcher at the College of Business and Economics of University of Rwanda.

Efficiency in allocation and resource use in Africa may lower input costs and make goods produced in Africa cost-effective and competitive, thus, stimulating more exports to the rest of the world, he said.