AfCFTA: Infrastructure may create more hurdles before take-off, Secretariat discloses

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By Francis Ogwo

The African Continental Free Trade Area (AfCFTA) planned to kick off by January 1st will be delayed a little further before its implementation. This is due to some needs the right infrastructure for customs border activities.

The Secretary-General of the AfCFTA Secretariat, Wamkele Mene, made this known on Tuesday in a Financial Times report.

According to Mene, the 33 nations have agreed to ratify the agreement, however, many lack the customs and infrastructure to fully implement continental free trade.

In his words: “It’s going to take us a very long time.

“If you don’t have the roads, if you don’t have the right equipment for customs authorities at the border to facilitate the fast and efficient transit of goods. If you don’t have the infrastructure, both hard and soft, it reduces the meaningfulness of this agreement.

Speaking further, Mene revealed that the purpose of the agreement is to move Africa from the “colonial commodity export economic model”, and use tariffs as a tool for industrial development.

“We want to move Africa away from this colonial economic model of perpetually being an exporter of primary commodities for processing elsewhere,” he said.

“We want to stop approaching tariffs as a tool for revenue. We want tariffs to be a tool for industrial development.”

He stated that bureaucratic bottlenecks in the continent might hinder tariff-free trade, noting Ethiopia’s decision to ban foreign investors from its financial services, which contravenes AfCFTA rules.

“I’m not saying countries must rush to dispute settlement. All I’m saying is that, if they do, the jurisprudence will bring clarity to the body of trade law that we’ve developed in the form of this agreement,” he said.

He added that AfreximBank is working to implement a continental trading platform to enable smaller businesses trade efficiently in the continent without currency difficulties.

Mr. Mene warned that the AfCFTA created some losers and not enough winners and said there might be backlash to free trade in the continent.

“Often in trade agreements the big winners are the already industrialised countries and the big corporations who can access the new markets literally overnight,” he said.

Recall that earlier this month, Nigeria became the 34th African country to fully ratify and submit its Instrument of Ratification of the African Continental Free Trade Area (AfCFTA).

In November, Customs officials in the continent agreed to draft continental guidelines to enable the movement of goods, services and people for the agreement.

The African Continental Free Trade Area (AfCFTA) is a free trade area which, as of 2018, includes 28 countries. It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations.

The free-trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization.

Accra, Ghana serves as the Secretariat of AFCFTA and was commissioned and handed over to the AU by the President of Ghana His Excellency Nana Addo Dankwa Akuffo Addo on August 17, 2020 in Accra.

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