African countries are set to begin trade in services under the African Continental Free Trade Area (AfCFTA) agreement as more countries formally get the green light to export across the region.
AfCFTA secretariat has listed tourism, transport, business, communication and financial services as its five priority areas for piloting trade in services in 2023, signalling its intent to speed up trade under the world’s largest single market.
Review of terms and conditions and the consideration of a roadmap for advancing negotiations in the five priority sectors under which services will be traded topped a four-day meeting of the Committee on Trade in Services under the African Continental Free Trade Area (AfCFTA) Protocol, held in mid-May.
“While trade in goods has traditionally received more attention, the AfCFTA recognizes the immense potential of services in transforming African economies,” said the secretariat.
After over a year of piloting trade in goods under the AfCFTA’s Guided Trade Initiative, traders in three countries have already exported their first consignment of goods backed by certificates of origin.
Traders in Tanzania and Tunisia are the latest to get these international trade documents that allow them to enjoy lower customs duties on regionally-traded goods.
“The ultimate objective is to ensure that AfCFTA is truly operational and the gains from the initiative are improved implementation in order to achieve increased inter-regional and intra-Africa trade that would yield economic development for the betterment of the continent at large,” according to the secretariat.
In May, the Tunis Chamber of Commerce and Industry issued certificates of origin to two Tunisian export companies in the chemical and food industries.
According to the secretariat, the certificate allows the companies to export goods to Cameroon, the third-largest import market for Tunisian products.
“The certificates play a pivotal role in facilitating trade under the agreement by granting Tunisian institutions access to preferential tariff cuts, ultimately leading to a 0% tariff rate within two years,” said the AfCFTA secretariat in its updates.
In April, the certificates were used to send an initial nine containers of coffee from Tanzania to Algeria with plans to shore up the export of up to 1,000 tonnes by the close of 2024.
Rwanda was the first African country to formally export goods under the preferential trade agreement after its export trading company, Igire Coffee Limited, flew coffee products to Ghana in September 2022.
The three countries are among eight countries that began piloting the export and import of goods under the AfCFTA’s Guided Trade Initiative in February 2022.
Over the year, products such as batteries, tea, coffee, processed meat products, corn starch, sugar, pasta, glucose syrup, dried fruits, and sisal fibre and ceramics have crossed regional borders under the initiative.
Other African countries are now queuing up to significantly increase their exports to regional markets by taking advantage of the attractive preferences under AfCFTA.
Ghana and Kenya recently held a five-day market entry expedition under the Guided Trade Initiative, where over 70 Ghanaian companies showcased their products in East Africa’s largest market.
The expedition also marked “the official launch of the Ghana Export Trade House by GEPA, which will serve as a one-stop, wholesale outlet to introduce Made-in-Ghana products into the Kenyan market and promote them to the Eastern and Southern parts of Africa,” according to the Ghana National AfCFTA Coordination Office.
According to a 2020 World Bank report titled, ‘Making the Most of the African Continental Free Trade Area: Leveraging Trade and Foreign Direct Investment to Boost Growth and Reduce Poverty,’ full implementation of AFCFTA would yield about US$450 billion in real income gains by 2035, driven by manufactured goods.
bird story agency