There are still kilometres of red tape to be cut through before the benefits of the African Continental Free Trade Area (AfCFTA) become evident.And African business needs to become more involved. A webinar on the need for the private sector to become more involved was told that “no matter how well grounded the AfCFTA objectives are, they will remain elusive if business in Africa is unable to take full advantage of the opportunities offered by the AfCFTA in terms of trade and investment.“It is therefore critical that the private sector is effectively engaged in the implementation process, with the active support of governments, the African Union (AU) and development partners.“So far, indications are that the private sector has not been adequately engaged. The process going forward must be more inclusive,” the webinar was told.In his keynote address to a thought leadership indaba, AfCFTA secretary-general Wamkele Mene said the secretariat had identified four sectors that could grow the economy of the continent relatively quickly – agro-processing, automotive, logistics and pharmaceuticals.“As the African continent, we have a very unique opportunity to drive growth on the back of AfCFTA,” says Mene. “The continent consists of 55 countries containing 17% of the global population, however Africa currently contributes less than 5% ($3.4 trillion) of global GDP.”What has been achievedThe AfCFTA has been operational since January 1, 2021, creating what is on paper a single market of 1.3 billion consumers.As of October, 54 countries had signed the agreement, which will create a free trade area that is quota free with free movement of goods and zero tariffs across the continent.Eritrea is the only African country that has not signed.In addition, 44 countries have ratified and deposited their instruments of ratification, making them State Parties.Remaining red tapePhase I of the AfCFTA negotiations, covering trade in goods, trade in services, and dispute settlement mechanism, are stuck on items bordering on the rules of origin, schedules of tariff concessions and specific commitments yet to be finalised.Rules of origin for about 88.03% of tariff lines have been finalised. Still to be agreed: textiles and clothing and motor vehicles.Phase 2 negotiations on competition policy, investment and intellectual property rights are said to be close to conclusion.The protocols on digital trade and women and youth in trade are at the design stage.According to Tralac researchers Gerhard Erasmus and Trudi Hartzenberg, there are a number of other issues which need to be addressed.Speaking at the annual Tralac conference in October, they said much work still had to be done on regulatory frameworks for a range of goods, commodities and customs protocols.Rules governing digital trade also needed to be agreed upon.Another issue is internal governance, with South Africa’s pending “grey listing” by the Financial Action Task Force due to non-compliance over money laundering and support for terrorism a concern.Rampant corruption throughout much of the continent also posed a threat to the successful rollout of the AfCFTA.
