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South Africa will export its first shipment of goods under the African Continental Free Trade Area (AfCFTA) agreement from the Port of Durban on Wednesday, as government ministers from across the continent meet in the city.
President Cyril Ramaphosa and Trade, Industry and Competition Minister Ebrahim Patel are to launch the start of the country’s preferential trade under AfCFTA as the first shipment of locally produced appliances prepares to leave the port’s Pier 1 Container Terminal for Ghana and Kenya.
The launch takes place on the sidelines of a meeting of the council of African trade ministers on 30 and 31 January in Durban. Government officials from 40 African countries are considering the input of technical experts on a range of trade and investment issues under the pact, including reports from senior trade officials and ministers who have been working on final protocols.
The trade agreement plans to bring together all 55 member states of the African Union in a common market of more than 1.3 billion people.
It aims to eliminate tariff and non-tariff barriers to boost intra-African trade, which is currently just 16% of the continent’s total trade, while growing value-added production and trade across all services sectors of the economy.
AfCFTA is also expected to provide South African exporters with new market opportunities on the continent beyond the Southern Africa Development Community.
So far, 12 countries including South Africa have finalised legal frameworks to enable trade to commence in thousands of product lines, including food and beverages, steel products and equipment, pharmaceutical and personal care products, chemical products and household goods such as fridges and televisions. South Africa published the terms under which it will participate in the agreement in a government gazette on 26 January.
Patel told the opening session that member states had made “significant progress” in resolving the modalities of the agreement and had in a short period pulled together the AfCTA.
“To win the deal is only the first step. Implementing the deal is the work of a generation. Trade has already commenced with the support of the guided training initiative launched by the secretariat and we now need to work closely with each other to grow markets with more trade and then extend it to services,” he said.
Speaking on the sidelines of technical working sessions on Tuesday, AfCFTA chairperson and Tanzania Investment and Trade Minister Ashatu Kijaji said some of the key issues were the participation of young people and women in the African economy, as well as growing the digital economy.
“We are also discussing the protocol on digital trade. The world is a global village. We have seen the effects of Covid-19 when each country was locked in and we are also increasing the percentage of our people who are doing business using digital systems, so this is another big achievement that we are going to achieve in this meeting because we are almost 98% completed with the digital trade protocols,” she said.
Intra-African trade stands at about 13%, compared with the 60%, 40%, 30% intra-regional trade that has been achieved by Europe, North America and the Association of Southeast Asian Nations respectively, according to data released by the African Union.
Kijaji said the goal was to increase intra-African trade to at least 20% by 2030, adding that ministers were also focusing on improving logistics and transport systems that were hampering trade on the continent.
“In transport in Africa we have a huge problem,” she said, giving the example of a member state that had recently experienced an eight-month delay in getting goods to the market on the continent.
Nigerian Private Sector Alliance executive director Legborsi Nwiabu said it was important to encourage each country to localise the production of goods in supply chains to trade these effectively with others on the continent.
“It is the passion and interest of Nigeria that the AfCFTA should succeed on the continent. Nigeria is one of the biggest economies on the continent and we are also interested in ensuring we can trade among ourselves, and increasing trade volumes, having market access for our own producers and manufacturers as well as accepting African products in Nigeria,” he said.
“The foundation of AfCFTA is to see how we can integrate as a continent among ourselves, and increase our trade volumes. Part of this meeting is also to strengthen that conversation to see that initiatives that are being put in place in terms of AfCFTA are fully achieved.”