A senior official with the bloc’s secretariat said on Monday that members of Africa’s new free trade area should complete their tariff reduction schedules and finalize essential rules of origin by July.
On Jan. 1, after months of delays caused by the global coronavirus pandemic, African countries officially began trading under the African Continental Free Trade Area (AfCFTA).
However, experts say that full implementation of the deal is likely to take years.
Under the AfCFTA agreement, members have to phase out 90 percent of tariff lines over the next five to 10 years. More time will be given to another 7 percent deemed sensitive, while 3 percent will be allowed to be placed on an exclusion list.
Tariff reduction schedules have been submitted by forty-one of the 54 member states of the zone.
Meanwhile, it is also necessary to complete the rules of origin – an essential step for determining which products may be subject to tariffs and duties.
According to Reuters Africa, it was revealed that Silver Ojakol, chief of staff at the AfCFTA Secretariat, said that nearly 90 percent of the rules of origin had now been agreed.
“So the remaining 10% must be completed by July this year,” he revealed. “By the end of June, we should have completed both the tariff scheduling and the rules of origin.”
The AfCFTA seeks to bring together 1.3 billion people in a $3.4 trillion economic bloc that, since the establishment of the World Trade Organization, will be the largest free trade area.
It is estimated by the World Bank that by 2035 it could lift tens of millions out of poverty. Ojakol, however, stated that the remaining barriers were not merely linked to tariff harmonisation.
“The biggest challenge perhaps is infrastructure interconnectivity to ease trading,” he said.
The poor road and rail links in Africa and excessive border bureaucracy will not vanish overnight.
During the discussion, Fola Fagbule, senior vice-president at the Africa Finance Corporation (AFC), said: “I do think there are a lot of green shoots, a lot of bright spots on the horizon in terms of investor appetite for infrastructure in Africa,”
The AFC recently secured $250 million from the U.S. in funding. Development Finance Corporation to help fund the continent’s infrastructure projects.
News on Alafarika studies , consultancy, events, and editorials.