AfCFTA: Knowledge of rules of origin key in ensuring success – Expert

It is important for business owners to familiarize themselves with the rules of origin as part of the process to ensure a successful role out of the African Continental Free Trade Area (AfCFTA) initiative, Unami Tlhole, an expert in Trade Rules of Origin, has said.

Rules of origin are the criteria needed to determine the national source of a product. Their importance is derived from the fact that duties and restrictions in several cases depend upon the source of imports.

Madam Tlhole explained at a webinar organized by the AfCfTA Policy Network in collaboration with the Bank of Africa, Ghana on Saturday, February 20 that it was important for all and sundry to know the product and goods that qualify to be noted as AfCfTA goods.

“It is really important for business people, for the industries, for us the officials who are administering the rules of origin to understand and know-how goods get to qualify to be known as the AfCfTA product,” she told the gathering.

For his part, Dr Francis Mageni, Head of Programmes at the AfCfTA Secretariat, has said production on the African continent must be the focus following the commencement of the AfCFTA initiative.

Dr Mageni explained that Africa is a huge market for African and diaspora investors. This situation, therefore, makes it mandatory to prioritize production to feed the market, he said.

Speaking at the webinar he said “We encourage investors and traders to come to Africa as the place to go, the huge market that we have will also catalyze investments into infrastructure, service sector, air transport energy. We want productions to take place because we have a huge market and if we don’t have anything to sell on it, it is not good at all so we want production to be prioritized.”

He further explained that Ghana has already started exporting goods to parts of the continent especially into South Africa under the AfCfTA initiative.

“As we speak the AFCTA is in force, trading has started. As we speak now, Ghana has already exported some consignment to South Africa and to Guinea.

“We have 36 ratifications with Zambia being the latest. We have got 54 signatures, just one country, the State of Eritrea is remaining to sign, and we have got 41 trade offers, 34 services offers. So this provides a very good start to our trading,” he noted.

The AfCFTA is a free trade area founded in 2018, with trade commencing as of 1 January 2021. It was created by the African Continental Free Trade Agreement among 54 of the 55 African Union nations.

The free-trade area is the largest in the world in terms of the number of participating countries since the formation of the World Trade Organization. Accra, Ghana serves as the Secretariat of AfCFTA and was commissioned and handed over to the AU by the President of Ghana Nana Akufo-Addo on August 17, 2020, in Accra.

The agreement was brokered by the African Union (AU) and was signed on by 44 of its 55 member states in Kigali, Rwanda on March 21, 2018.

The agreement initially requires members to remove tariffs from 90% of goods, allowing free access to commodities, goods, and services across the continent.[16] The United Nations Economic Commission for Africa estimates that the agreement will boost intra-African trade by 52 per cent by 2022.

The proposal was set to come into force 30 days after ratification by 22 of the signatory states. On April 2, 2019, The Gambia became the 22nd state to ratify the agreement, and on April 29 the Saharawi Republic made the 22nd deposit of instruments of ratification; the agreement went into force on May 30 and entered its operational phase following a summit on July 7, 2019.

The general objectives of the agreement are to: create a single market, deepening the economic integration of the continent, establish a liberalised market through multiple rounds of negotiations, aid the movement of capital and people, facilitating investment move towards the establishment of a future continental customs union, achieve sustainable and inclusive socio-economic development, gender equality and structural transformations within member states.

The rests are to enhance the competitiveness of member states within Africa and in the global market, encourage industrial development through diversification and regional value chain development, agricultural development and food security and resolve challenges of multiple and overlapping memberships.

During the webinar which was on the theme “AfCfTA rules of Origin for exporters and importers, traders, private sector and entrepreneurs with the rules of origin experts”, the Morocco Ambassador to Ghana, HE Mrs Imamana Ouaadil who was the special guest, noted that the dream of founding Fathers of the Organization of African Unity (OAU) to make the continent prosperous is being achieved with the implementation of the AfCfTA.

She said, “The dream of the founding fathers of the Organization of African Unity (OAU), for a united and prosperous continent in a spirit of unity and solidarity is a step closer to the reality today with the advent of the AfCfTA.”

HE Mrs Imamana Ouaadil further said the uncertainties provided by the coronavirus pandemic makes it prudent to receive the vision of the AfCfTA.

“The pandemic has different socio-economic inequalities in our African countries. The uncertainties created confront us with the need to receive the vision of the AfCfTA to develop intra-African trade, to promote employment of African labour and finally industrialize Africa. Morocco strongly believes in equality, development based on intra African cooperation.

“It must be said here that Moroccan companies have been acting on initiatives of His Majesty the King of Morocco which has placed sub-Sahara Africa as a key strategic investment location. As a result of trade between Morocco and the African continent, it experienced an average annual growth of 6per cent over the period between 2009 and 2019.

“Exports have almost tripled during the last 10 years. It was 21 billion in 2019 against 8.3billion in 2009. Import also rose to 17, almost 18 billion. World trade is on the rise but significantly potentials silt remains to be developed. The AfDB ranks Morocco as the second biggest African investor in sub-Saharan Africa.