Uganda Readies to tap into Continental Free Trade Area Promise

KAMPALA, Uganda: Cooperatives dealing in coffee exports and other agricultural commodities are set to reap big from the African Continental Free Trade Area (AfCFTA) that was officially commissioned on Monday.

AfCTA – which, with its 55 member states will be the world’s single-biggest trading block since the formation of the World Trade Organization was on Monday given a new boost after President Muhammadu Buhari committed Africa’s largest economy and most populous nation to the trading block that will now be headquartered in Ghana.

Initially adopted at the 30th Ordinary Session of the African Union Heads of State and Government held in Addis Ababa, Ethiopia in January 2018 and launched two months later in Kigali Rwanda in March last year, the ambitious trade pact seeks to bring Africa’s 1.3billion people into one single economic lock worth $3.4 trillion, and grow intra-African by about 52% by 2022.

Currently, Trade amongst African countries remains the lowest of all intra-continental trade globally, with Afriexim Bank’s 2017 report showing that intra-Africa trade accounted for just 13% of the continent’s total trade, compared to 18% for Latin America, 56% for North Ameria, 52% for Asia, and 68% for Europe.

Now, to better these figures, AfCTA will require member countries to liberalize up to 90 percent of their trade in a period of 5 and 10 years for Non-Least Developed and Least Developed Countries (LDCs) respectively, to allow seamless mobility of goods on the continent.

According to the outgoing chair of the African Union Ministers of Trade who also doubles as Uganda’s Trade, Industry and Cooperatives Minister Hon. Amelia Kyambadde, although the required minimum of 22 member-country ratifications for the trade zone to be operational were reached in April this year, the operationalization of the trading block will start this month.

With Nigeria signing unto the trade pact, 54 of the continent’s 55 countries have so far signed the trade pact.

At the extra-ordinary Summit of the Heads of State in Niamey on Monday, the Heads of State flagged off AfCFTA by launching the following Instruments: Tariff offer concessions portal, Africa trade observatory mechanism, Non-Tariff Barriers identification, and reporting mechanism, and Product rules of origin among others.

“The AfCFTA framework agreement negotiations will cover trade in goods, services, investment, and trade-related intellectual property rights, competition policy, the Protocol on the Rules and Procedures on the Settlement of Disputes,” said Kyambadde.

The negotiations will take place in two phases- Phase I which is on-going and covers trade in Goods and Services, while phase II will cover Investment, competition, and trade-related intellectual property rights.

How is Uganda benefiting from the AfCFTA?

Uganda has over the past 1 year been chairing the negotiations process for the African Continental Free Trade Area, and Kyambadde is optimistic the country is set to reap big from AfCTA: “Already, our exports to Africa are increasing, and accounted for over 51% of total exports in 2017 and 2018,” she said.

She said that growth in African exports was improving Uganda’s general export performance, rising from US$2.482bn in 2016 to US$2.901bn in 2017 and US$3,087bn in 2018, excluding informal trade.

Going forward, Kyambadde argued that with the conclusion of the negotiations of the AfCFTA, there will be a reduction in tariffs for a number of strategic export products to especially African countries such as Coffee, Tea, Tobacco, Cereals, Iron and Steel Products. Others are dairy and dairy products, Sugar and Sugar confectionery, among others.

“These frameworks will certainly lead to further growth of our exports, thus economically benefitting our people that are engaged in the production process,” she said.

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