Nations hesitant to ratify trade deal

Arusha. Many African countries are hesitant to ratify the African Continental Free Trade Area (AfCFTA) due to fears over liberalization.

A leading banker in the continent says some states fear the pact would lead to free and uncontrolled trade that would harm their economies.

But Dr Donald Kaberuka, the former President of the African Development Bank (AfDB) maintains the continental treaty was not 100 per cent liberalization.

“You have a lot of work to do to help public institutions and the business community to address fears which impede free trade”, he told lawyers from the region last week. Meeting under the aegis of the East African Law Society (EALS) in Mombasa, the lawyers discussed the challenges and opportunities of the pact.

AfCFTA, unveiled in Kigali, Rwanda early this year, requires ratification by 22 countries for it to come into force.

Reports abound some countries fear treaty could be a potential source of loss of revenues and jobs for the continent’s small economies.

But Dr Kaberuka insists that the treaty was not about fiscal measurements but rather about services, logistics, finance, data and information technology.

He played down worries over dumping or lack of respect for the rules of origin by some countries should they ratify the treaty.

“Around 50 per cent of wealth would be accrued from services and the countries harbouring such fears are important in terms of services”, he said.

He told the meeting that problems facing intra-African trade have been compounded by non-tariff restrictions.

“Unless we handle issues of non-tariff space, the continental trade pact’s progress will be slow”, the respected banker pointed out.

Former Kenyan Chief Justice Willy Mutunga also expressed his concern over the success of the trade pact, saying the current leaders of the continent were not keen on it.

AfCFTA was unveiled by the African Union (AU) leaders in Kigali in March this year and is aimed to become the world’s largest single market with a cumulative GDP of $3.4 trillion.

The milestone pact is seen as a key part of AU’s long-term development plan, Agenda 2063, which calls for easing trade and travel across the continent. ends ends