South Africa: "We want tariffs to be a tool for industrial development," says AfCTA Secretariat

“It’s going to take us a very long time. If you don’t have the roads, if you don’t have the right equipment for customs authorities at the border to facilitate the fast and efficient transit of goods . . . if you don’t have the infrastructure, both hard and soft, it reduces the meaningfulness of this agreement."

To stimulate fast and efficient trade Africa will need the right gear for customs authorities at the border for full execution of the African Continental Free Trade Area (AfCTA) which is going into effect on 1 January, according to a report by Nairametrics. 

Reportedly disclosed by the Secretary-General of AfCFTA Secretariat, Wamkele Mene, the execution will take a long time to attain its full meaning. 

Even though the agreement has been agreed upon by 33 nations, several still lack the infrastructure and customs to implement the continental free trade said Mene. 

He mentioned, “it’s going to take us a very long time. If you don’t have the roads, if you don’t have the right equipment for customs authorities at the border to facilitate the fast and efficient transit of goods . . . if you don’t have the infrastructure, both hard and soft, it reduces the meaningfulness of this agreement".

However, the aim of the agreement as said by Meme is to eradicate the “colonial commodity export economic model” from Africa and to boost the tools for industrial development by using the tariff. 

Mene said, “we want to move Africa away from this colonial economic model of perpetually being an exporter of primary commodities for processing elsewhere. We want to stop approaching tariffs as a tool for revenue. We want tariffs to be a tool for industrial development.”

He mentioned that the bureaucratic challenges in Africa would hinder tariff-free trade, mentioning Ethiopia’s decision of banning foreign investors from the country's financial services, contravening the rules of AfCFTA.

I’m not saying countries must rush to dispute settlement. All I’m saying is that, if they do, the jurisprudence will bring clarity to the body of trade law that we’ve developed in the form of this agreement,” Mene said.

He further cautioned that several losers have been created by AfCFTA and not enough winners, due to which there could be a backlash to free trade in Africa. 

“Often in trade agreements the big winners are the already industrialised countries and the big corporations who can access the new markets literally overnight,” Mene said.

He also mentioned that AfreximBank is functioning to implement a continental trading platform to allow smaller businesses to trade efficiently in Africa without currency difficulties.