Nghiinomenwa-vali Erastus
According to analysis by theTrade Law Centre (Tralac), only 9% of petroleum gas, 6% of gold, and 6% of iron ores remain in Africa where they have been mined.
However, almost all live cattle and chickens remain on the continent, the trade-based body revealed in its 9th edition of the “The African Continental Free Trade Area Trade Guide”, released last month.
The status quo is expected to be worsened if the envisioned internal beneficiation is not implemented with the Europeans lining up to benefit from Namibia’s hydrogen and ammonia production potential.
Tralac analysis shows that when it comes to energy — natural gas and oil account for 14% of intra-Africa exports.
Precious metals, mostly gold, only account for 3% of what Africa exports to each other. As for industrial metals – copper, nickeland iron ores – only 3% of what Africa mines are part of intra-Africa exports.
In 2021, according to the Tralac analysis, intra-African exports were valued at US$71 billion, which is 14% of Africa’s world exports.
Between 2020 and 2021 intra-Africa exports increased by 7% while Africa’s world exports increased by 32%.
South Africa is the main intra-Africa exporter and importer, accounting for 37% of intra-Africa exports and 14% of intra-Africa imports.
Other main intra-African exporters include Nigeria, Egypt, Zimbabwe, Morocco, Kenya, Tanzaniaand Zambia, accounting for 71% of intra-Africa exports.
Zooming in on what Africans are trading with each other, 17% of intra-Africa exports are mineral fuels, followed by exports of machinery (5%), precious stones(5%), ores (4%) and copper (4%).
Most intra-Africa imports are dominated by SADC member states, with exception of Ivory Coast, Morocco and Kenya which also feature in the top 10 intra-Africa importers, Tralac analysis stated.
The biggest portion of Africa’s world exports of cereals, soap, milling products, explosives and photographic equipment are intra-Africa exports.
Mineral such as gold is mainly exported by Tanzania, Namibia, Zambia and Zimbabwe; almost all of which is destined for South Africa and Uganda.
Most of the petroleum gas exports are by Algeria.
As for the maize, exports are from South Africa of which 44% is destined for Kenya and Zimbabwe.
DRC and South Africa account for 93% of intra-Africa copper ores exports, and 97% of these are destined for Zambia.
Tralac analysis has indicated that agricultural products account for 19% of intra- African trade and in 2021, it was valued at over U$13 billion.
Furthermore, the continent export around U$62 billion of its agricultural produce, with South Africa being the dominant player, Tralac data shows.
Namibia accounts for 3% of the intra-Africa trade in beverages and 12% of fishery products as by the end of September 2022. Moreover, the country is quite dominant in diamonds.
The analysis also revealed that many African countries trade under the free-trade areas of their regional economic communities (RECs), with reduced or zero tariffs.
Members of fully-fledged customs unions such as SACU trade duty-free with one another.
Tariffs are therefore highest between those countries that do not already have a preferential agreement in place as they trade under the Most Favoured Nation (MFN) terms, Tralac found.
Trade facilitation within the continent is hampered by high transport costs, delays, port inefficiencies and cumbersome border procedures.These factors have been found to harm the trade of goods more than any tariffs.
Tralac pointed out that Annex 4 of the AfCFTA Protocol on Trade in Goods sets out rules that seek to address specific procedural hurdles to facilitate trade procedures.The Annex presents a significant opportunity for state parties to reap the economic benefits of improving the speed and efficiency of border procedures.
WHY DOES AFCFTA MATTER MORE NOW?
Founder and publisher of Forbes Africa, Rakesh Wahi in the latest 30 Under 30 Forbes
for Africa edition wrote that looking ahead, the realignment of power blocs will be the
outcome of self-interest that will drive every nation towards making choices that will suit
their long-term goals.
This is clearly being observed now with the West, Russia, China ontheir side, and Africa floating around like a paper and asked to choose.
Wahi wrote that “developed nations are not vested in Africa and their interest could
falter based on unpredictable external factors.”
Then the question now is: do African states/economies insulate against the
risks of being left unaided in the time of need?
Wahi said the only option for African economies is immediate diversification by
prioritising regional and continental collaboration and creating greater interdependency.
He said security in all its forms (trade, financial or safety) has to be derived from within
the continent and not from nations and allies who have continuously indicated that they
have no interest in Africa’s long-term sustainability.
The continent currently has various trading blocs,namelySouthern African Development Community (SADC), the Economic Community of West African States (ECOWAS), the Economic Community of Central African States (ECCAS), the East African Community (EAC), the Community of Sahel-Saharan States (CEN-SAD) and the Intergovernmental Authority on Development (IGAD).
According to Wahi, the regional blocs need to be further strengthened to enable the
implementation of the AfCFTA.
He said the continental free trade area would have not come at a better time for the
African continent and it has the stated focus since the – “AfCFTA aims at accelerating
intra-African trade and boosting Africa trading position in the global market by
strengthening the continent’s common voice and policyspace in global trade negotiations”.
“It is now time to implement various proposals and build efficiency,” Wahi wrote.
NAM TO LAUNCH ITS AFCFTA IMPLEMENTATION STRATEGY THIS WEEK
Namibia signed the AfCFTA Agreement on 2 July 2018 and deposited the instruments of ratification on 1 February 2019, indicating its willingness to improve its intra-Africa trade.
According to a press release from the ministry of industrialisation and trade (MIT), governmant plans to launch the National AfCFTA Implementation Strategy and Action Plan for 2022 – 2027 this week Tuesday, 22 November 2022.
Furthermore, MIT will conduct a training workshop on the status of the AfCFTA negotiations and the Women and Youth Protocol at the Windhoek Country Club the same day.
The ministry explained that the AfCFTA is integrating gender equality into states’ trade policies through their strategies for implementation as a response to gender equality. Namibia thus recognises the importance of gender equality for the development of international trade and economic cooperation.
Article 3 emphasises the promotion of gender equality as one of the general objectives of AfCFTA, whereas Article 27 of the protocol on trade in services acknowledges the need to improve the export capacity of formal and informal service suppliers. This is in particular attention to micro, small and medium-sized operators and women and youth service suppliers.
MIT team explained that, as part of the implementation of the AfCFTA, capacity building and training of potential beneficiaries on the opportunities the agreement present are required.
Due to gender inequality in the continent, women and youth entrepreneurs are faced with the challenges of lack of access to information on opportunities in their environment and how to take advantage of them.
Additionally, women and youth are often not aware of how to champion inclusion in the negotiation and implementation of agreements such as the AfCFTA, the MIT pointed out.
It is in this context that the United Nations Economic Commission for Africa (UNECA) in collaboration with MIT will jointly conduct a workshop in Windhoek thisTuesday to train women and youth entrepreneurs, corporates, and current and potential exporters.
The training involves understanding the benefits of the AfCFTA and how to benefit from it; and also consultation on provisions to be included in the AfCFTA Women and Youth Protocol.
The AfCFTA agreement provides for protocols on trade in goods, trade in services, investment, intellectual property rights, and competition policy.
Specific objectives are to progressively eliminate tariffs and non-tariff barriers to trade in goods and services.
Tralac is an independent not-for-profit company, founded and supported by seco (The Swiss Secretariat for Economic Affairs), the University of Stellenbosch Faculty of Law and the University of Namibia Faculty of Law. It conducts in-depth research on international trade law matters; provides advice and news on trade law; and conducts workshops and short training courses. The Centre is based in South Africa and its regional focus encompasses Mozambique, Namibia, Botswana, Tanzania and South Africa.
Email: erastus@thevillager.com.na
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