AfCFTA gets real after a pandemic-induced lull

## Trade deals under the African Continental Free Trade Area (AfCFTA) agreement are getting underway after a false start due to the economic fallout from COVID-19 –– which also highlighted its importance to the continent.

By Seth Onyango, bird story agency 

Kenya’s recent twin shipment of batteries and tea to Ghana –– the first from an East African economy under AfCTFA –– has injected fresh impetus into the fledgling free trade outfit. They also underscore the importance of the trade area to export receipts amid biting global supply chain disruptions.

The shipments are a part of a trial phase to ramp up trade under AfCFTA involving Kenya, Ghana and six other states: Cameroon, Egypt, Mauritius, Rwanda, Tanzania and Tunisia.

Last week, AfCFTA Secretary-General Wamkele Mene revealed that at least 96 different products from the eight countries could be freely traded under the rules of the trade pact.

The approved products include horticultural products, pharmaceuticals, rubber, aluminium kitchenware, sugar, steel, and wooden products and will enjoy duty-free and quota-free trading.

Kenya’s exports to Ghana come a year after Equatorial Guinea made an inaugural shipment of 2,000 tons of methanol to Gabon under the AfCFTA, with the Africa Energy Chamber soon afterwards promising to build on the momentum to showcase the value of regional trade and cooperation in driving the continent’s economic growth.

Earlier in 2021, Ghanaian alcoholic products maker Kasapreko airfreighted a container load of goods to South Africa, while Ghandour Cosmetics shipped by sea items to Guinea.

Kenya’s shipments to Ghana –– fast becoming the AfCFTA’s biggest proponent –– are a shot in the arm of an outfit tipped to transform the economic fortunes of Africa.

Ghana's High Commissioner to Kenya, Damptey Bediako Asare, told VOA that the trial phase is a significant step in the implementation of AfCFTA.

With the ongoing global efforts blunting the effects of the pandemic, the free trade agreement is seen as critical to turbocharging Africa’s post-COVID recovery and tapering supply chain disruptions from the war in Ukraine.

The pandemic had a two-edged impact on AfCTFA implementation; while it slowed down the rollout, it also showed how it can serve as a shock absorber for geopolitical turbulence and other economic disruptions.

Olanrewaju Olaniyan, an economics professor at the University of Ibadan noted that the pandemic highlights the need for self-sufficiency among African countries and the urgent need for a market for goods and services produced within the continent.

United Nations Economic Commission for Africa (UNECA) estimates that AfCFTA will boost intra-African trade by 52.3 per cent once import duties and non-tariff barriers are eliminated.

Currently, exports within the continent amount to only 16.6 per cent of total trade, according to the African Development Bank (AfDB).

The AfCFTA went live on January 1 and will cover a GDP of US$3 trillion US dollars of the market, and help diversify intra-African trade by encouraging more industrial goods as opposed to extractive goods and natural resources.

Historically, more than 75 per cent of African exports outside the continent consisted of extractive commodities, whereas only 40 per cent of intra-African trade was extractive.

The AfCFTA was established to position Africa as the largest free trade area in the world, enabling tariff reductions and market liberalisation while significantly reducing barriers to trade.

Since its implementation, the agreement has boosted output in the services, manufacturing and natural resources sectors, enabling resource-rich countries to enhance production and monetise resources, and energy-deficient countries to capitalise on new trade opportunities.

The AfCFTA is tasked to implement protocols to eliminate trade barriers and cooperate with member states on investment and competition policies, intellectual property rights, settlement of disputes and other trade-liberating strategies.

bird story agency