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Africa to wait longer for free trade as pact January take-off fails

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Trade Cabinet secretary Betty Maina. FILE PHOTO | NMG

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Summary

  • AfCFTA Secretariat secretary-general Wamkele Mene said the member states lack customs procedures and facilities to make tariff-free trade feasible this month when the treaty was meant to become effective.
  • Mr Mene told the Financial Times that the African countries are not prepared to enforce the terms of the continental free trade at the moment.
  • The journey towards Africa Continental Free Trade Area gained momentum in March 2018 when 44 nations signed up during the African Union Extra-Ordinary Session in Kigali, Rwanda.

The African Continental Free Trade Area (AfCFTA) that was meant to start this January will not take effect as planned, delaying the much-touted seamless trade in the region.

AfCFTA Secretariat secretary-general Wamkele Mene said the member states lack customs procedures and facilities to make tariff-free trade feasible this month when the treaty was meant to become effective.

Mr Mene told the Financial Times that the African countries are not prepared to enforce the terms of the continental free trade at the moment.

The journey towards Africa Continental Free Trade Area gained momentum in March 2018 when 44 nations signed up during the African Union Extra-Ordinary Session in Kigali, Rwanda.

The free trade area was supposed to take effect last July but the the AfCFTA secretariat delayed it to this month.

Currently 54 out of the 55 African Union member states have signed the AfCFTA. The body creates the single largest trade block in the world.

Kenya was the first country in the eastern Africa region to ratify the trade deal after the National Assembly adapted it.

However, the country is expected to lose about Sh10 billion in taxes once the AfCFTA takes effect, according to UN Economic Commission for Africa.

The amount is a fraction of 0.6 per cent of all collected revenue that Kenya earns from tariffs on imports, which the free trade wants to scrap in order to allow free movement of goods in the continent.

The taxman collected Sh1.5 trillion in taxes in the year to June 2020.

However, East Africa as a region is projected to earn $ 1.8 billion in welfare gains and two million jobs created from the successful implementation of AfCTA.

Once it becomes effective, the treaty will allow free movement of goods and services from one country to another in the continent.

The agreement allows citizens of different countries to work in any of the African nations without restrictions as kit is at the moment where an individual requires a work permit.