Precedent and Operational Conditions for Trading Under the African Continental Free Trade Area (AfCFTA)

Editor’s Note: Recently, Dr. Francis Mangeni was Director of Trade and Customs at the Common Market for Eastern and Southern Africa (COMESA). With the African Continental Free Trade Area (AfCFTA) kicking into high gear, Mangeni now serves as Head of Trade Promotion and Programs of what could be the world’s largest free trade area since the formation of the World Trade Organization (WTO). Technically speaking, the AfCFTA is a single African common market with free movement of goods, services, people, and investment that expects to (a) increase trade amongst African countries from its current 15 percent – 18 percent level; (b) stimulate production and spur the growth of regional value chains, and (c) strengthen the capacity of Africa’s companies to access and supply world markets. In this article, Mangeni sets out the sort of measures that would spur trading under the AfCFTA.

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By Francis Mangeni
Head of Trade Promotion and Programs of the AfCFTA

In the first place, it is essential to note that the current trajectory and volume of inter-company, intra-company, and other trade flows are a factual basis for trading under the AfCFTA.

Thus, producers, traders, the logistics industry should be ready with orders and consignments to convert their current export and import patterns to trade under the AfCFTA regime. Of course, our industrialists and policymakers have much to do to boost our level of industrialization and export strategies, respectively. Together – with producers, traders, and logistics companies – there is an opportunity to build critical levels of export and import potential and regional value chains.

Based on variable geometry and transition arrangements, trading under the AfCFTA can begin based on the critical instruments adopted by the operational phase of the AfCFTA. Rules of origin, tariff concessions, monitoring mechanisms, payment and settlement systems, and the trade observatory were negotiated, concluded, and ratified by the AfCFTA Member States. Simply put, Africa’s negotiators already have in place agreed-upon rules of origin that set out conditions for products to qualify as made in an AfCFTA country, tariff schedules that indicate the reduced or eliminated duties. We already have dispute settlement mechanisms (DSMs) and an online system to address non-tariff barriers (NTBs). Similarly, the Africa Trade Observatory and other market intelligence tools for information on trade and investment opportunities are already in place – alongside the Africa Payment and Settlement System and other payment platforms.

On the other hand, many African countries already have competent or designated national authorities to issue origin certificates. For instance, the Ghana Chamber of Commerce is set to issue AfCFTA Certificates of Origin. For those countries that are not yet up to speed, there are various guidelines. Illustratively, the ecosystem for AfCFTA certificates of origin should include databases of producers, exporters, and importers as Regular Economic Operators or accredited clients. These AfCFTA countries will have to train issuing officers, producers, traders, the logistics industry, and work with technical and financial partners to bring all stakeholders to the fold. But again, considering that customs authorities stand to benefit from increased AfCFTA trading, they ought to produce and avail the required trade and customs documents for exportation, importation, and transit, including a Single Administrative Document procedure for imports from AfCFTA countries. Interestingly, regional arrangements such as the Economic Community of West African States (ECOWAS), customs authorities will require further training on the administration of AfCFTA product-specific rules of origin because they have only used general rules of origin.

A Whole of Government Approach

Invariably, for trade under the AfCFTA to progress as our people hope it will, all AfCFTA governments must instill a sense of urgency via a robust all-Government approach to implementing and benefiting from the AfCFTA. The first step to this process is the Operationalization of an Adjustment Financial Facility to support the process. Governments must maintain functional inter-institutional and inter-disciplinary committees to coordinate public and private partnerships. Seminally, the public-private sector dialogue must be institutionalized to benefit national AfCFTA policy, implementation, monitoring, review, and corrective measures. In doing this, the authorities must also make space for the civil society, academia, knowledge producers, and entities like AfroChampions. For the record, many regional and international institutions have the technical resources to be of services. But at a bare minimum, government and trade support institutions must invest in ICT-enabled contact, inquiry and information offices, points, and tools.

We also believe that ministries of education and other stakeholders must introduce the AfCFTA and regional integration courses into their curricula, further institutionalizing the trade-related entrepreneurial approach to education. Overall, the enhanced trade regime under the AfCFTA cannot do anything on its own. Enhanced trade and production or productivity are about learning lessons and translating these into action. Hence, this AfCFTA process requires that governments become ‘learning governments’ to inculcate a ‘learning economy ethos’ into respective borders alongside framework partnerships between education institutions, industry, and the financial services sector. To provide further inkling, if immigration authorities do not see the value of the AfCFTA, how are they to facilitate the movement of persons under the AfCFTA?

The Task of the AfCFTA Secretariat

In our position as a Secretariat, we must work with our Member Countries to ensure that we have the resources to help Africa achieve the aspirations of our independence forefathers. By hosting, staffing, and financing the AfCFTA Secretariat with US$ 10 million, Ghana has provided a sterling example of African solutions for African challenges. The Secretariat intends to build a solid repertoire of financial, technical, and outreach partners. It is already on track to avoid the sort of distractions that hobbled other regional institutions in their infancy.

Summarily, the capacity to trade under the AfCFTA is already there. Economic operators just need to have products to trade. On the other hand, customs and other regulatory authorities should produce and avail to economic operators the required trade documents. National regulators should be ready to facilitate trade under the AfCFTA with the knowledge that national capabilities to benefit from the AfCFTA will get better with the continuous practice and facilitation of unfettered trade.

The Author Can Be Reached on [email protected]