A meeting of the council of ministers of trade across the continent has concluded with a call for effective trading under the AfCFTA following the unanimous decision to commence with the current 88percent of approved rules of origin, pending its endorsement by the heads of states.“Throughout yesterday, the council of ministers made some groundbreaking decisions; it will now be conveyed to head of states at the Assembly of the African Union.The most significant of it is that we’ve bid down key rules of origin that allows us to say with confidence to heads of states that we have a package of products that we can start trading on,” says Ebrahim Patel, South Africa’s Minister of Trade, Industry and Competition.
Over the last two years, the negotiators and ministers have been meeting frequently and that concluded with a package that has 88percent of all products on the tariff books across the continent for which they have the agreed rules of origin.“In other words, we now have defined for each of them, what constitutes the minimum African content for that product to be traded between countries on the continent on the basis of preferences; that is a big breakthrough and I’m happy to say that the two-year period of work that’s been undertaken since 2020, identified more than 850 additional products for which rules of origin have been agreed,” Mr. Patel adds.
Mr. Wamkele Mene, Secretary-General of the AfCFTA Secretariat, highlighted the significance of the various tools that have been deployed to drive the implementation of the single market, including the AfCFTA Adjustment Fund.“The trade ministers have discussed the tools that are required to implement the AfCFTA and to make it relevant to the business community and entrepreneurs. Agreement must become one that creates opportunities for them,” he points out.
Mr. Mene says discussions on the Adjustment Fund that is intended for countries that will experience revenue losses in the short term as a result of eliminating or reducing their tariffs, was also very apt and timely.“We are not at a point where, in Africa, we can use tariffs or duties as a tool for industrial development which is where we want to be in a few years. For many of our countries, tariffs are still a tool for revenue generation but over time we want to change that and rather use it for industrial development purposes.
In the short term, we have to find other mechanisms and this Adjustment Fund is intended for that purpose. It is an initial US$1billion that’s been made available by the Afreximbank for this purpose,” he notes.
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