The Government of Ghana is preparing to host its first major pan-continental trade meeting under the auspices of the Africa Continental Free Trade Agreement (AfCFTA) whose secretariat has been located in Accra. Although no definite date has been set for the meeting which would attract the various trade ministers of African signatory states to the agreement, the meet is considered absolutely crucial because issues to be settled at it are requisite for a successful commencement of the continental single market from January 1, 2021.
Consequently, AfCFTA’s Secretary General, Wamkele Mene is pushing for the meeting to hold before the end of November. President Nana Akufo-Addo, who reopened Ghana’s international airport at the beginning of September has assured him that Ghana stands ready to host the trade ministers from across the continent as soon as they are ready themselves. The meeting is crucial in that it will address arguably the single most important issue underpinning duty-free trade between member states – that of the applicable rules of origin. Indeed, trade experts all around the world assert that it is strange that this vital aspect of the agreement should have been left so late to resolve considering its importance and the potential for deep dispute.
Rules of origin determine what goods specifically qualify for duty-free trade between African states on the basis that they indeed have originated from within a member country to the agreement. Thus universally accepted rules of origin are needed to prevent one country from refusing entry of exports from another member country on the grounds that it did not originate from that country.
Experience within sub-regional economic groupings within Africa such as the Economic Community of West African States has shown that many African countries are willing to allow enterprises from outside the continent to re-bag/repackage their goods and label them as being made there just to enable the goods to enter a neighbouring country duty-free.
Indeed, this is why Nigeria sometimes refuses entry of certain goods under the ECOWAS Trade Liberalization Scheme, which is supposed to allow duty-free trade among member states in goods originating from a member state – a stance which has generated deep controversy within the sub-regional grouping.
For instance, Asian rice merchants have often used neighbouring Benin Republic as a staging post, to repackage rice cultivated in that part of the world so as to gain duty-free access into Africa’s 175 million strong largest consumer market.
Actually, this is a major reason why Nigeria originally refused to sign up to AfCFTA, expressing a worry shared by virtually all of Africa’s largest consumer markets.
Without universally accepted resolution of what qualifies as made in Africa, Ghana may face major problems too. For instance, the upcoming meeting will have to decide whether cars assembled in Ghana using completely knocked down parts manufactured outside of Africa qualify for duty-free entry into other African countries.
This means the planned meeting in Accra has to be held before the end of the year at the latest – and must be successful if AfCFTA is not to have its commencement postponed yet again.