…as Ghana begins test transactions with six countries
Without any unexpected hitches, the Ghana National Coordinating Office (NCO) of the African Continental Free Trade Area (AfCFTA) will from October this year pilot a guided trading activity with six countries within the bloc, under supervision of the AfCFTA secretariat, Coordinator of the NCO, Dr. Fareed Arthur, has confirmed.
This pilot trade, according to Dr. Arthur, is expected to test documentation and processes of the AfCFTA and open the gate for other countries to start trading in earnest.
“Ghana will pilot a commercially meaningful trade from next month with Kenya, Mauritius, Tanzania, Rwanda, Cameroon and Egypt for the first time, using the AfCFTA documentation. This will help answer the question that has been on the minds of many people: when are we going to start trading?” he stated.
Dr. Arthur was speaking at the just ended 3-day 7th African Tax Research Network (ATRN) Annual Congress in Accra on the theme ‘The Tax and Revenue Implications of the AfCFTA’, and said though the trade agreement seeks to boost intra-African trade by progressively removing tariff and non-tariff barriers, it also comes with certain challenges.
He argued that successful implementation of the AfCFTA will require state parties to invest in the human capacities of revenue authorities, as well as embrace digitisation of tax administration on a regional scale to improve efficiency and ensure there is convergence at the continental level.
The United Nations Conference on Trade and Development (UNCTAD) has estimated that Africa may lose about US$1.9billion to implementation of tariff liberalisation in the short-term; and up to US$4.1billion in the medium-term.
But Dr. Arthur admitted that, as with many trade liberalisation arrangement, the AfCFTA comes with its own challenges; which are potential risks of short-term destabilisation and disruption of African economies – particularly those countries depending solely on tariff revenue for growth.
He said these countries may have to put in place appropriate mitigation measures and adaptions to ensure they are able to counter some of the risks.
“Achieving all these will pave the way for establishing a common Customs union and a strong common market,” he indicated.
The World Bank has said AfCFTA presents opportunity for member-countries to reduce poverty, broaden economic inclusion and boost growth, despite the possible initial challenges of implementation.
Full implementation of the agreement, according to the bank, will boost regional income by 7 percent to US$450billion, lift 30 million people out of extreme poverty, and another 70 million people from moderate poverty.
It is anticipated that the trade bloc will further spur wage gains of women by 10.5 percent compared to 9.9 percent for men while making African countries more competitive, a situation that will propel innovation and growth.
