Tariff reduction schedules will be finalised by July, AfCFTA tells members
However, experts say full implementation of the deal is likely to take years
11 January 2021 - 15:47
byJoe Bavier
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The port area stands beyond high-rise properties in Cape Town. Picture: BLOOBERG/DWAYNE SENIOR
Members of Africa’s new free trade area should complete their tariff reduction schedules and finalise essential rules of origin by July, a senior official with the bloc’s secretariat said on Monday.
African countries began officially trading under the African Continental Free Trade Area (AfCFTA) on January 1, after months of delays caused by the global coronavirus pandemic.
Experts, however, say full implementation of the deal is likely to take years.
Under the agreement establishing the AfCFTA, members must phase out 90% of tariff lines over the next five to 10 years. Another 7% considered sensitive will get more time, while 3% will be allowed to be placed on an exclusion list.
Forty-one of the zone’s 54 member states have submitted tariff reduction schedules.
Meanwhile, the rules of origin — an essential step for determining which products can be subject to tariffs and duties — must also be completed.
During a panel discussion at a Reuters conference on Monday, Silver Ojakol, chief of staff at the AfCFTA Secretariat, said nearly 90% of the rules of origin had now been agreed on.
“So the remaining 10% must be completed by July this year,” he said. “By the end of June, we should have completed both the tariff scheduling and the rules of origin.”
The AfCFTA aims to bring together 1.3-billion people in a $3.4-trillion economic bloc that will be the largest free trade area since the establishment of the World Trade Organisation.
The World Bank estimates it could lift tens of millions out of poverty by 2035. But Ojakol said that the remaining obstacles were not simply related to tariff harmonisation.
“The biggest challenge perhaps is infrastructure interconnectivity to ease trading,” he said.
Africa’s poor road and rail links and excessive border bureaucracy will not disappear overnight.
“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,” Fola Fagbule, senior vice-president at the Africa Finance Corporation (AFC), said during the discussion.
The AFC recently secured $250m in financing from the US Development Finance Corporation to help fund infrastructure projects on the continent.
Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Tariff reduction schedules will be finalised by July, AfCFTA tells members
However, experts say full implementation of the deal is likely to take years
Members of Africa’s new free trade area should complete their tariff reduction schedules and finalise essential rules of origin by July, a senior official with the bloc’s secretariat said on Monday.
African countries began officially trading under the African Continental Free Trade Area (AfCFTA) on January 1, after months of delays caused by the global coronavirus pandemic.
Experts, however, say full implementation of the deal is likely to take years.
Under the agreement establishing the AfCFTA, members must phase out 90% of tariff lines over the next five to 10 years. Another 7% considered sensitive will get more time, while 3% will be allowed to be placed on an exclusion list.
Forty-one of the zone’s 54 member states have submitted tariff reduction schedules.
Meanwhile, the rules of origin — an essential step for determining which products can be subject to tariffs and duties — must also be completed.
During a panel discussion at a Reuters conference on Monday, Silver Ojakol, chief of staff at the AfCFTA Secretariat, said nearly 90% of the rules of origin had now been agreed on.
“So the remaining 10% must be completed by July this year,” he said. “By the end of June, we should have completed both the tariff scheduling and the rules of origin.”
The AfCFTA aims to bring together 1.3-billion people in a $3.4-trillion economic bloc that will be the largest free trade area since the establishment of the World Trade Organisation.
The World Bank estimates it could lift tens of millions out of poverty by 2035. But Ojakol said that the remaining obstacles were not simply related to tariff harmonisation.
“The biggest challenge perhaps is infrastructure interconnectivity to ease trading,” he said.
Africa’s poor road and rail links and excessive border bureaucracy will not disappear overnight.
“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,” Fola Fagbule, senior vice-president at the Africa Finance Corporation (AFC), said during the discussion.
The AFC recently secured $250m in financing from the US Development Finance Corporation to help fund infrastructure projects on the continent.
Reuters
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