Rules of Origin to help ease trade among African countries

AFRICAN Continental Free Trade Area (AfCFTA) has come up with protocols to encourage consumption of local content, which will see the continent experiencing growth in industrialisation and investment, the bloc’s secretary general Mr Wamkele Mene has said.

The AfCFTA is one of the flagship projects of Agenda 2063: The Africa We Want. It is a high ambition trade agreement, with a comprehensive scope that includes critical areas of Africa’s economy, such as digital trade and investment protection, among other areas.

By eliminating barriers to trade in Africa, the objective of the AfCFTA is to significantly boost intra-Africa trade, particularly trade in value-added production and trade across all sectors of Africa’s economy.

Africa has a total of eight regional economic communities, which are recognised by the African Union, and among these are the Comesa (Common Market for Eastern and Southern Africa), EAC (Eastern African Economic Community) and Sadc (Southern African Development Community). Zimbabwe is a member of Comesa and Sadc.

The continent welcomed its newest economic bloc in January last year, the AfCFTA, which brings the continent into a single market, the world’s largest such grouping with about 1,3 billion people.

Speaking during the Zimbabwe National Chamber of Commerce (ZNCC) 2022 Trade and Investment conference held in Bulawayo on Wednesday, Mr Mene said there is need for full integration of the African countries to reach full utilisation of the free trade area.

He said there are regulations, which are being put in place to facilitate all local goods and services to have zero duty when trading within the continent by year 2035.

ZNCC Conference-AFCFTA Wamkele Mene

“The ambition is that by the year 2035, at least 93 percent of trade within Africa will attract zero duty hence we are completely eliminating duty for intra Africa trade.

“That shall be embedded in local content requirements which we refer to as Rules of Origin. The Rule of Origin is specifically intended to have a threshold for local content and make sure that value edition takes place in Africa,” said Mr Mene.

He said importation of products from outside Africa shall attract duty as usual. Mr Mene said the concept of Rules of Origin will help to ease trade among African countries as 88 percent of the products will have the same Rule of Origin.

“We are now able to trade in goods and services using the same rules. The importance of this Rule of Origin is to make sure that industrialisation happens within Africa,” said Mr Mene.

“So, we are creating a market for ourselves and we are protecting that market using trade and investment rules.”

AfCFTA

The AfCFTA makes trade between African countries easier by providing new export opportunities for African countries’ products and services to trade with each other without tariffs or other hindrances, and thus driving an improved access to the biggest market space, ultimately leading to sustainable economic growth.

Mr Mene also urged private sector to play part in the industrialisation of the continent as he said the sector is a very important pillar of the AfCFTA.

He said during phase two of the implementation of AfCFTA they will be working on protocols on investments, international property rights, digital trade and protocol in women and youths trade.

Minister Sekesai Nzenza

Speaking at the same event, the Minister of Industry and Commerce Dr Sekai Nzenza said Zimbabwe has anchored its industrialisation policy in readiness to tap into the vast investment and trade opportunities under the AfCFTA.

She said what remains is scaling up private sector awareness and buy-in.
Dr Nzenza said consolidating domestic and regional value chain drive is critical in building resilient and sustainable industries as opposed to reliance on exporting raw materials.

She told delegates, who included industry and commerce executives that up scaling intra-regional trade is at the heart of the African Union (AU) blueprint and masterplan popularly known as “Agenda 2063-The Africa We Want”, to which Zimbabwe fully subscribes.

ZNCC Conference-AFCFTA

“The Africa we want is an Africa that trades with itself. The history of industrialisation is connected in Africa, the future of industrialisation is ours to collectively design,” said Dr Nzenza.

“By way of policy foundation, Zimbabwe is ready for the AfCFTA. What remains is private sector awareness and buy-in. I, therefore challenge AfCFTA, ZNCC and other business bodies to conduct workshops and expositions to ensure full and active participation of the private sector in the trade initiative,” said Dr Nzenza. –-ebusinessweekly