AfCFTA sets agenda for business operations on African continent
African Continental Free Trade Area (AfCFTA), in partnership with the East Africa International Arbitration Conference (EAIAC), has held a digital discussion to help set a new agenda for business operations on the continent. The webinar was held with a view to planning and reviewing business models, strengthening the issues of multilateralism, and also reducing all bilateral trade frictions among countries, as well as implementing and resolving trade disputes among Pan-African countries while trading.
The discussion followed the launch of the free trade which started on the basis of the AfCFTA with the African Union Assembly decision made on 5 December 2020 at the 13th Extra Ordinary Session of the Assembly of the Union on the AFCFTA agreement to create opportunity for the Pan-African Private Sector to build Africa through manufacturing, distribution, transportation, health ecosystem, among others.
The event, which was held via zoom, had attendees from countries like Nigeria, Rwanda, Sierra Leone, South Africa, Tanzania, Uganda, United Kingdom, USA, Botswana, Ethiopia, France and Kenya even though more countries were expected to join in the meeting.
This year’s edition was led by a keynote speaker, coordinator of the African Trade Policy Centre at the United Nations Economic Commission for Africa, Professor David Luke, who embraced the idea of AfCFTA passionately, describing it as a welcome idea that is timely for free trade environment for Africans.
He pointed out that African market are fragmented with about 55 African countries as participants and called for the “removal of every form of trade barrier”. While calling for fewer protocols in negotiations, he proposed sufficient transparency among trade members, as well as reality check through legal framework in resolving disagreement to make sure markets in Africa function adequately.
Prof. Luke stated how AfCFTA implementation can change agriculture and food trade. He mentioned that the webinar was jointly organized by the international food research institute, Africa trade policy sector, the Economic Commission for Africa as well as the agriculture business enabling environment section.
His words: “Agriculture as the major economy sector for Africa generates a $100billion or 50% of the continent GDP and annually although the contribution of GDP varies widely from country to country ranging from about 2% from South Africa to 35% in Mali according to the 2020 Africa economic outlook.
“We need to remind ourselves that trading with neighbours is how the rest of world is doing trade. AfCFTA will bring a growth in exports and GDP.”
Responding on dispute settlements under AfCFTA, he encouraged member states to base their activities on the rule of law, and do away with cultural beliefs, while urging them to stop shying away from going through legal processes, a culture he attributed to African nations’ long history.
Excited by the countless opportunities the agreement has brought to the African legal sector, especially in dispute resolution, Luisa Cetina, Director Anjarwalla& Khanna, Kenya, expressed hope that with AfCFTA, there will be employment opportunities for legal practitioners.
She further explained that with the full liberalisation of trade in Africa under the custody of AfCFTA, a lawyer trained in one African country could cross the border to work in a neighboring country, which is another great opportunity for legal practitioners.
According to her, “government and state bodies, as well as private owned companies, will all be looking for legal representation and guidance in relation to AfCFTA’s implementation.
Beatrice Chaytor, Senior Expert of Trade in Services in the AfCFTA support unit at the African Union also emphasized the need to have proper AfCFTA documentation in trade dealings, custom facilitation-declaration forms, presence of regimented products, and removal of all forms of technical barriers.
Beatrice noted that if all these are confronted, AfCFTA will be an avenue which Africans can explore to unlock the windows of opportunities. She assured members of quick settlement of dispute of any matter once it is taken to the Dispute Settlement Body (DSB) and an Appellate Body (AB), having been heard by panels appointed for each case, adding that protocol makes provision for arbitration.
According to her, “there are different liberalisation timelines with sensitive products to be liberalised over the next 10 years for developed countries and over a period of 13 years for the least-developed African countries, and this trade protocol will apply to imports, exports and goods in transit and “without proper interpretations about trade, barriers will still exist”.
Anthony Coleman, Senior Manager and Principal Economist at African Export–Import Bank (Afreximbank), in his analogy, compared AfCFTA to a beautiful forest which all must play an active role in keeping it vibrant and alive for it to reach its maximum potential.
He said: “Members should learn from one another and work hand-in-hand with AfCFTA, and there has to be a mindset for all Africans to move towards an Africa of purpose, a continent that believes to be the next powerhouse.”
Anthony added that though some of the agreements have been benchmarked, market will only grow when there is a divergent market system, propelled by good marketing policies for all Africans.
He suggested that in achieving the proper implementation of AfCFTA, Development Finance Institutions (DFI) need to support African entities to produce products and act as a pillar to ensure that when goods are produced, producers can be linked to buyers.
AfCFTA was signed into law on 21 March 2018 and entered into force on 30 May 2019, and trading under the agreement commenced on 1 January 2021. The agreement has achieved almost universal acceptance, with only one nation, Eritrea, yet to sign. Nigeria’s signing, in 2019, after a year’s delay, was an important milestone and it became the most recent country to ratify late last year.
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