African Ministers of Trade have agreed to allow the trading of some 850 products to commence under the Rule of Origin protocol of the African Continental Free Trade Area (AfCFTA).
The items include cheese, edible oil, fish, and some machinery.
The agreed products, subject to the approval of Heads of States of African Union (AU), will make up 88 per cent of products that already include a list of over 3800 products with tariff lines set and negotiations concluded with Party States agreeing to the rule of origin.
“We now have defined for each of them what constitutes a minimum African content for their product to be traded between countries on the continent on the basis of preferences,” said Mr Ebrahim Patel, the Chairperson of the Council of Ministers of Trade at a press briefing.
He was providing updates to journalists on the outcome of the 8th meeting of AfCFTA Council of Ministers, which was held on January 28, and January 29, 2022.
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Discussions at the meeting, he said, had provided guidance to negotiators to work to bid down negotiations on the remaining products such as tobacco products, automobiles, sugar as well as clothing and textiles.
Emphasising the importance of negotiations, he said, the start of trading under the AfCFTA had been delayed largely due to the inability to get the needed threshold of products to trade.
“Until we got to this stage, we had the legal modalities ready, but we were not able to meet the threshold of sufficient trade that we can undertake.”
He attributed the success of negotiations to political will of leaders of countries that would want to create opportunity for their citizens under the free trade area.
Mr Patel said it was time for the continent to industrialise and look beyond its status of generators of raw materials that fed industries of other continents.
The Secretary-General of AfCFTA Secretariat, Wamkele Mene, said discussions at the meeting also focused on the recently launched Pan African Payment and Settlement System (PAPSS) which enabled trading in 42 different currencies on the continent.
He said tariffs in most African countries were a tool for revenue generation as opposed to it being a tool for funding industrialisation.
The situation, he said, had necessitated the setting up of an Adjustment Fund with an initial amount of US$1 billion to offset short term revenue losses as a result of reducing or eliminating tariffs.
“Our studies indicate that we will need US$7 billion to plug this gap that will be created by the losses in the short term, and we are grateful to our strategic partner Afrexim bank,” he said.
The Council of Ministers consists of trade ministers or other ministers, authorities, or officials duly designated by AfCFTA State Parties.
The Council, which meets twice a year in ordinary sessions and as and when necessary in extraordinary sessions, reports to the Assembly through the Executive Council.
While acting within its mandate, decisions taken shall be binding on State Parties and also decisions that have legal, structural or financial implications shall be binding upon their adoption by the Assembly.
It has the authority to take decisions on all matters under the AfCFTA Agreement and reports to the Assembly through the Executive Council of AU.
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GNA