AfCFTA's Guided Trade Initiative: An Encouraging Move from Kenya, Rwanda, and Ghana
Share this
By Adebayo Abubakar
It is now two years since trading commenced under the African Continental Free Trade Area (AfCFTA) on January 1, 2021. To test-run the feasibility of the agreement, the AfCFTA secretariat announced in 2022 that it would launch a pilot scheme tagged the “Guided Trade Initiative” (GTI). The initiative would see eight countries – Cameroon, Egypt, Ghana, Kenya, Mauritius, Rwanda, Tanzania, and Tunisia-representing five African regions (selected from among many countries that expressed interest)- trading in goods produced in their countries under the AfCFTA preferential tariffs regime. The AfCFTA Secretariat revealed that “the Initiative will achieve its intended goal through matchmaking businesses and products for export and import between these interested countries in coordination with their national AfCFTA implementation committees,” to ease the process of trading and shorten the turnaround time for moving goods and services across borders. The Secretariat also, on the 25th of July 2022, published an “e-Tarriff Book“, and the “Rules of Origin Manual”, which contains the tariff offers by each of the member countries, in addition to unified customs clearing procedures and requirements under the GTI, that would guide whoever seeks to trade with them.
The AfCFTA is one of 15 flagship projects of the African Union‘s Agenda 2063. It is expected to be the turning point of Africa’s socio economic prosperity, which will position the continent as the largest single non-global trading bloc in terms of the number of participating countries since the formation of the World Trade Organisation (WTO).
The masterminds of project AfCFTA never expected any hitch-free sail. They were aware of how rough the road to the “Promised Land” would be, hence, they’ve given ample room for the “I’s” to be crossed, and the “T’s”, dotted. Nations that are signatories to the agreement spent years studying the agreement in order to streamline the contents and provisions within the context of their respective national interests and laws. They studied it very carefully to make sure they were not signing away their respective economic and political sovereignties. However, two years after the agreement was officially adopted in Kigali in 2018 and commencement of trading began in January 2021, the biggest economies like Nigeria, South Africa, and Ethiopia, among others, have remained hesitant to “bell the cat”, except for Egypt which is part of the GTI select-eight. None of them appears ready to take the first leap, to give comfort to the smaller economies to follow suit. It was therefore, exhilarating and encouraging news when the German media outfit – Deutsche Welle reported in October last year that, “Kenya has shipped a locally-made car, and truck batteries as well as a consignment of Kenyan-grown tea to Ghana in the past months, in what was the first intra-continental trade within the framework of the AfCFTA, as embedded in the GTI. Rwanda has also exported processed coffee beans to the West African nation. Secretary-General of the AfCFTA His Excellency, Wamkele Mene made it known that no fewer than 96 different products from the member countries could be traded freely under the AfCFTA.
Ketepa Ltd in Kenya shipped a tea consignment to Ghana. Credit: United Nations
In an article written by Julians Amboko, and published by “The East African”, it was reported that “East African member states have dominated the list of countries that have domesticated the Africa Continental Free Trade Area (AfCFTA) adequately to facilitate the commencement of trade under the trading bloc’s framework.” To now extend it beyond the East African region, calls for commendation by stakeholders. Therefore, while we celebrate the encouraging feat, we hope that the “big boys” of the continent in no distant time, join the train, demonstrate their readiness, and lead by example.
During an interaction I had recently, with a chieftain of one of the local chambers of commerce and industry in Nigeria, who gave his name as Mr. Fatai Buhari, he said; “he appreciates the need for every country to be circumspect in adopting the agreement, but that he does not understand why some African countries are holding back on the AfCFTA for fear of their countries becoming dumping grounds, yet, they have no qualms, importing goods from America, China, European, and South East Asian countries.” They, according to him, “suddenly become critical (and hesitant) of importing, when it comes to goods originating from fellow African countries.” He is therefore of the opinion that there is “an urgent need to change that attitude,” if the aims and objectives of the AfCFTA, as contained in AU’s Vision 2063 are to be achieved. I cannot agree less with him.
Other African countries that are signatories to the agreement need to change their views and idiosyncrasies towards goods (and services) of African origin so that we can buy “Made-in-Africa goods to grow Africa.”
Ghana, Kenya, Rwanda, and other countries selected for the GTI, have set an enviable record and sent encouraging signals to the rest of the continent. I view that as the best piece of news in post-Covid-19 Africa. The earlier other African countries emulate them, the sooner the people on the continent realise the benefits of the AfCFTA. On that note, I urge you (readers and other stakeholders) to join me in commending these countries – Ghana, Rwanda, and Kenya for their exemplary moves, rooted in Pan-African disposition that culminated in their carrying out what is historically the first transnational [but intra-continental] transaction within the framework of the AfCFTA, as we expect other countries to join the moving train.
Adebayo Abubakar is a Nigerian journalist. You can reach him via email, marxbayour@gmail.com