A GHANAIAN trade expert on Wednesday projected the benefits that the African Continental Free Trade Area (AfCFTA) has on the continent’s secondary industries will gradually emerge since trade commenced one year ago.
Jonas Atangdui, the director of Economic Affairs at the Kwame Nkrumah Ideological Institute, a local policy think tank, told Xinhua news agency that the AfCFTA would create employment, income and tax revenue for governments, and reduce import bills of African governments through the development of secondary industry on the continent.
The African Union (AU) Ministers of Trade on January 29 announced the conclusion of negotiations and adoption of rules of origin to cover 87.7 percent of goods traded by member states. These rules represent the criteria for using the national source of products to determine tariffs and restrictions on them under the trade agreements.
The expert said the conclusion of negotiations was a critical breakthrough, which would enable trading in products of African origin under the preferential trade agreement to begin.
‘This means that you cannot trade goods wholly manufactured in Europe or elsewhere under the agreement. A certain amount of value addition must come from inside Africa. And this will lead to the emergence of secondary industries to feed bigger industries and consumers,’ Atangdui said.
He also lauded the launching of the Pan-African Payment and Settlement System (PAPSS), describing it as a game-changer for trade facilitation on the continent.
‘PAPSS is another milestone that we should celebrate due to its importance in trade facilitation. Then also, the speed with which African countries signed on to the agreement is commendable. This is a continent known for procrastination when it comes to these things. But this time, they seem to be working within time,’ said Atangdui.
The expert also described the establishment of the dispute settlement body to deal with trade conflicts in the free trade area as welcome news.
‘Disputes will arise, and those disputes must be settled democratically and openly. With that, people would have confidence in the dispute settlement mechanism of the free trade area,’ added the expert.