With the clock ticking to 1st January 2021- the new date set for implementation of the African Continental Free Trade Area (AfCFTA) agreement, African Union Member States are challenged to build up the necessary logistics and infrastructure identified as the main challenge in implementing the Protocols of the agreement.
But just how ready are the African countries to open up for continental trade? In an exclusive interview with KFM’s Catherine Ageno, Mr Selasi Koffi Ackom, the Chief Executive Officer of Ghana International Trade & Finance Conference (GITFIC), whose recent 2020 edition was dedicated to discussions on the AfCTA highlights what needs to be done.
Below are excerpts of that interview;
What should policy makers in Uganda do to get the process of implementation of the AfCFTA back on track given the severe Covid-19 economic impact on the continent?
AfCFTA is already on track. The Commencement date only shifted from 1st July 2020 to 1st January 2021. In terms of policy; I think that each AU Member State will have to strictly adhere to implementing the protocols enacted within the AfCTA frame work.
Policy makers must also become pro-AfCFTA and keep their markets open for intra-African trade.
In addition, policy makers must encourage their private sector groups to seek partnerships and source markets within the AfCFTA region. Member states that have not ratified agreement must do so and be part of the continent wide trade platform.
In your view, what needs to be done to reset the African trade agenda with such markets as the US and UK as a win-win?
Africa is not often regarded as a major market except where we present and provide opportunities for high margins. AfCFTA can help Africa obtain better local content deals, improve the pricing of raw commodities export, demand fair trade with other blocs especially on subsidies and fair treatments on market access.
Has anything positive come out of the Covid-19 pandemic that the African economies can ride on to grow their rather declining GDPs?
Yes, I agree that Covid-19 has helped with domestic industrial innovations. It has also made policy makers aware of the level of vulnerability among Africans driven by skills gaps. Tailoring training to create a skillful population would bring tremendous economic growth to most African Countries like Uganda.
Are you concerned about the low level of commitment of African leaders to the new date set for implementation of the AfCFTA agreement, especially that there has been lack of political will by some leaders to implement measures required to successfully launch the agreement?
Yes, there are concerns. Although 55 nations were quick to agree to a free continental trade, not all have ratified the AfCFTA agreement. Secondly, the structure of decision making for AfCFTA implementation and progress seems heavily political that can provide opportunities to some Political leaders to implement counter AfCFTA laws within their boundaries. I wish to see the protocols and decision making on the AfCFTA moved more on the regulatory agenda that binds member states to comply with the protocols with appeals available at the African court.
How do you intend to navigate the domestic political dynamics that may not be conducive to AfCFTA implementation?
The truth is that, way before AfCFTA, every country on the African continent had trade partners. Most of these have invested extensively to protect their interests and in some cases influenced the outcome of elections just to maintain and advance their interest. They wake up one day to see countries on the African continent ratifying an agreement to commence trade amongst themselves. This will certainly not come as good news to Africa’s already existing trading partners. I believe that this domestic political dynamics we are seeing with some countries on the continent are being influenced by these foreign partners in order to advance their continuous interest.
What is your take on the trade negotiations launched recently between the Trump administration and the Kenyan government, how will it affect implementation of the AfCFTA agreement? How is it likely to affect Kenya’s obligation as an EAC and the AfCFTA member with regard to the customs union. Can Kenya in this case negotiate concessions for the bloc?
Negotiations between Kenya and the US can become destabilizing for the AfCFTA agenda because Kenya is one of the biggest economies in Africa and is expected to show strong commitment to this deal. However, I am confident Kenya will negotiate bearing in mind the protocols already agreed and ensure any potential agreement with the US does not become counterproductive to the AfCFTA agenda where it encourage similar major economies such as south Africa, Egypt or Nigeria to lower their commitments to the deal. I would hope Kenya refrains from any deal with the US with potential to undermine the continent front.
What informed your decision to focus this year’s Ghana International Trade & Finance Conference on the role of infrastructure as opposed to promoting industrialization as a tool for boosting intra-Africa trade?
Issues of infrastructure are not peculiar to one country on the continent. Infrastructure deficit is visible in every country on the continent therefore, if Africa is looking at AfCFTA which simply implies the movement of goods and services within the continent in a more convenient and cheaper way by relaxing tariffs up to 95%, then the old age issue of infrastructure should be critically looked at. Road infrastructure, rail infrastructure, digital infrastructure, physical infrastructure, tariffs, non-tariffs, customs and ports harmonization, currency and fiscal harmonization et al, will have to critically be looked at. If solutions are not found for these indices; the entire AfCFTA will suffer some major hindrances. This is what informed our decision to theme our 4th Conference held on October 27th-28th 2020 in Accra, Ghana under the theme: “Optimizing AfCFTA for Africans: The Role of Logistics Infrastructure.”
It critically looked at these measures to be submitted to the AU and all various stakeholders to study and implement.
Industrialization cannot be achieved in isolation. To achieve continent wide industrialization, we need to build the critical infrastructure that can support the industrialization drive. Availability of key and critical infrastructure providing easy market access for intra-African trade will definitely spur big industrial innovations, unleash serious entrepreneurial drive and promote more production on the continent. It will also drive capital flows and the partnerships that can be useful for industrial success.
What challenges do you foresee with implementation of the agreement?
Compliance with the protocols and free movement of people within the continent. African countries must be willing and permit free movement of people to permit exploration of opportunities among Africans. I believe free movement of people within the continent will greatly serve the AfCFTA agenda.
I foresee compliance as a major challenge. This is because, already existing agreements within our various blocs have been facing the same for decades now. In the Western bloc which comprises of all West African Countries; Nigeria one day decided to close its borders without recourse to the existing agreement on movements of goods and services. Ghana one day decided to comply with an old internal trading protocol which forbids non-Ghanaians from retailing without considerations.
The AfCFTA has several protocols for smooth intra-trade. All member states have their own internal trading structures. AfCFTA demands that, member states relax their internal structures to allow for free flow of goods and services however these will certainly conflict with domestic trade protocols. Self-interest first. My only hope is the fact that, the European Union, Canada, US and Mexico Trade et al have over the past years seen some successes chalked but for the UK rescinding on their decision; one could say the European Union in whole have been a success. AfCFTA can also see success if member states adhere to the pros and cons.