Slow AfCTA tariff offers hold back free trade bloc

Thursday, January 28th, 2021 00:00 | By
2021 Africa Continental Free Trade Area (AfCFTA) PHOTO/Print

Delays in submission of tariff offers and lack of rules of origin by member countries are holding back trading among Africa companies under the newly launched Africa Continental Free Trade Area (AfCFTA).

For instance, under the East African Community (EAC) trading block, Burundi and Tanzania have not issued their tariff offers.

In the Ecowas block Liberia and Benin are not ready yet.

The continental free trade area agreement is seeking to eliminate tariffs on 90 per cent of all the goods produced on the continent.

A tariff offer is a proposal by the member countries on how they plan to move towards zero tariffs target.

Countries lagging behind have been given up to June this year to finalise their submissions.

The number of countries that are ready to join the continent-wide duty-free quota-free movement of goods is now 41.

“A total of 54 Member states have signed up as members and submission of offers has been extended to June 2021,” said George Dinda, Principal Trade Development Officer, CfTA Unit at the State Department for Trade.

Pilot project

So far no country in Africa has started trading under the AfCFTA protocol except Ghana which has sent some consignment to South Africa on a pilot project.

Members are under pressure to harmonise various protocols.“We are working on protocols such as intellectual property and e-commerce issues to help steer trade,” Dinda.

EAC department of international trade is engaging in sensitisation programmes to ensure that many citizens understand what is happening.

Kenya Revenue Authority said they are adjusting custom procedures to accommodate AfCFTA protocols.

The tax agency is also printing the rules of origin to train its staff in preparation. 

Maureen Wanginda, a Customs official at KRA said those wishing to export under the AfCFTA will have apply to KRA for certification.

“If they qualify, they will be issued with a certification by KRA as stamp of approval having met the rules of origin,” she said.

Democratic Republic of Congo, Egypt, Madagascar, Malawi, Mauritius, Seychelles and Sao Tome and Principe, were among the first countries to submit their tariff offers since as they are not part of any Customs Unions.

Kenya Trade Network Agency (KenTrade) is working on an online single window infrastructure  to ensure that businesses can access relevant information and pay taxes online.

“The single window system seeks to eliminate challenges related to the processing of import and export cargo documentation,” said Rose Rono, director trade facilitation at KenTrade.

Some of this infrastructure includes the Pan African Paymnet and Settlement System that makes it possible for African companies to clear and settle intra-Africa trade transactions in their local currencies.

Others are implementation of Marine Cargo Insurance with now 27 insurance companies already integrated.

“We have already started classifying the various types of goods we have and are preparing our online platforms to ensure that traders can get all the information they need including licences from government offices in one one portal,” said Rono.

Track progress

To ensure effective implementation of AfCFTA, Kenya Association of Manufacturers Chairman Mucai Kunyiha said, “the Secretariat needs to continuously monitor, and track progress made by state parties in fulfilling the requirements to trade under the agreement”.

However, the continent is facing other challenges such as logistical issues relating to infrastructure, lack of competitiveness among others.

Last month, countries from the Central African Economic and Monetary Community and the Southern African Customs Union tabled their tariff offers, bringing to 18 the total number of states meeting the deadline.

More on Business