HOSTING AFRICAN TRADE SECRETARIAT WON’T BE EASY

WINDHOEK - While the Kingdom of Eswatini pushes to host the secretariat of the AfCFTA, it has been stated that implementing the process will not be easy.
This is because there are currently a lot of challenges related to free trade agreements not only in the SADC region but the whole African continent.

AfCFTA is an acronym for the African Continental Free Trade Area Agreement which the Kingdom of Eswatini signed a few weeks ago and announced its interest in hosting its secretariat.

collaboration

The AfCFTA is supposed to work in collaboration with the Tripartite Free Trade Area (TFTA), which was introduced in 2016.
During the SADC Industrialisation Week held in Namibia last week, several speakers acknowledged that there were many challenges affecting the process of free trade agreement.

It was stated during a session on trade facilitation that given vast differences between countries in Africa in terms of size and development, strength of economies, and strength of currencies, implementing the process would not be a stroll in the park.

potential

It was highlighted that the challenges included the fact that member states feared potential loss of revenue by their governments as most of them regarded customs duties as their major source of generating revenue.

“Free movement of labour is also another challenge. Also, such an agreement will mostly benefit those countries with proven comparative advantage in manufacturing and robust infrastructure. There is also the challenge of lack of infrastructure and political will,” it was highlighted during the session.
Furthermore, it was lamented that there was lack of an enforcement entity which would lead to a situation where governments of the different member states would drag their feet in implementing the process.

However, it was highlighted that despite the challenges, both the AfCFTA and TFTA had the potential to save the African continent by improving economic integration through providing an impetus to the development of economies and infrastructure.

imported

The two strategies were also said to be having a potential to allow customers to have access to cheaper imported products from other countries.
The aims of the two strategies include increasing intra-regional trade and inflows of foreign capital and creating a single continental market for goods and services, with the movement of business persons and investments, paving way for an economic African union.

They are also aimed at increasing intra-African trade through progressive elimination of tariffs leading to the facilitation of cooperation to custom matters and simplifying rules of origin and custom procedures.

duplications

Furthermore, they are aimed at addressing complications and duplications caused by overlapping regional value chains, supporting growth of intra-African trade through development of regional value chains and increasing competitiveness of African industrial products through harnessing the economies of scale of a continental wide market.

Currently, intra-African trade is 17 per cent while in the SADC region it is estimated at 10 per cent, while the percentage between the region and other African countries is three per cent.

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