Wamkele Mene, the secretary-general of the African Continental Free Trade Agreement (AfCFTA) says it will be wrong for anybody to think that the implementation of the AfCFTA has been rushed.
Mene said Africa is now trading under new rules and new preferences because “we want to have a single integrated market on the African continent and I know that in certain parts of the world we get criticism…
“We are told that we are rushing things, that we are not quite ready. But I want to ask; those who hold that view tell me of a trade agreement where all countries are ready at the same time,” he said.
Speaking in a webinar on the AfCFTA, Mene added, “I have never heard of a trade agreement where in that particular arrangement every single country is ready on day one. Not to my knowledge, it doesn’t exist and so I regret that as Africans we are held to a much high standard for how trade agreements should operate in practice.”
He said, “We are not doing it [AfCFTA] because we want to prove anything to anyone outside the African continent. We are doing it because it is in Africa’s interest to have an integrated market and so to the extent that there is something that we have to demonstrate and prove, and it is to 1.2 billion Africans that we shall and are committed to an integrated market and that 1 January 2021 was the start of that process.”
“There will be countries and there are countries who have the requisite customs infrastructure in place today as we speak who are trading under the AfCFTA and there are countries who are in the process of establishing those customs procedures that are required.
“But traders will not be penalized; there would be a system where you will be credited for the trade that is taking place since 1 January 2021 and the credit may come in the form of a duty that is reduced, it is entirely up to the member states to decides how that credit will be or the reinvestment will be provided.”
He outlined some mechanisms being recommended to address the challenge. “Some of the options we have considered are the establishment of an account from which later exporters can draw down for their reinvestment in recognition of the fact that we are trading with new rules which are preferential rules.
He added, “This mechanism that we are talking about of reinvesting exporters is not a new invention, various trade agreements around the world where there’s a timeline between the rectification and implementation of the agreements, it has been done before. It’s not a reinvention of the wheel, we are using modules that have been used before in other parts of the world in other trade agreements.”
The AfCFTA provides an opportunity for Africa to create the world’s largest free trade area, uniting 1.3 billion people in an economic bloc with a combined GDP of US$2.5 trillion and ushering 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 a customs union. It will also grow intra-African trade through better harmonisation and coordination of trade liberalisation policy across the continent.
The AfCFTA is further expected to enhance the competitiveness of the African industry and enterprise by exploiting the opportunities for scale production, continental market access and better reallocation of resources.
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