How AfCFTA will boost East African states’ income

Arusha. Implementation of the African Continental Free Trade Area (AfCFTA) will boost the East African economies, according to the World Bank.

This will be realised through reduction of trade costs relating to trade facilitation, among others.

Other costs expected to take a plunge are those relating to non-tariff measures and non-tariff barriers.

“The continental trade protocol is projected to increase real income for East Africans,” said Mr John Bosco Kalisa, executive director of the East African Business Council (EABC).

Swift implementation of the continental trade agreement would be a boon for the East African Community (EAC) bloc.

For Tanzania, the second largest economy in the region, the real income is projected to increase by 10 percent between 2021 to 2035.

Kenya, Uganda and Rwanda will record real income increases of 11.8 percent, 3.8 percent and 3.6 percent respectively.

No statistics were available for three other EAC partner states; Burundi, South Sudan and the Democratic Republic of Congo (DRC).

Mr Kalisa revealed this last week in Nairobi during a private sector sensitization workshop on AfCFTA agreement.

The two-day workshop organised by EABC through its GIZ support programme, focused on trade in goods protocol.

EABC goodwill ambassador on transport and logistics Auni Bhaij said implementation of the trade pact will increase intra-Africa trade in manufactured goods.

For the EAC, the share of intra-AfCFTA exports to total global exports will increase by 28 percent for Tanzania and 43 percent for Kenya.

Projections for the same for Uganda and Rwanda will be 29 percent and 33 percent respectively.

EABC board director Mucai Kunyiha said the AfCFTA agreement was a clear testimony that the African countries were committed to the new arrangement.

“They have shown commitment to doing more trade and investments among themselves,” he pointed out.

AfCFTA aims to create a huge market of 1.3 billion consumers with a combined GDP valued at $3.4 trillion.

Mr Kunyiha, a business leader in Kenya, challenged the private sector in the seven-nation EAC bloc to take an active role by trading under the AfCFTA.

Kenya Private Sector Alliance (Kepsa) deputy CEO Victor Ogola said that non-tariff barriers continue to derail the realization of the AfCFTA pact.

“Building Africa into a continental village needs the understanding of the characteristics of a village and that this should start from a political level,” he said.

He expounded that Kenya has exported batteries and Tea to Ghana under the AfCFTA Guided Trade Initiative amid plans to export electric cables and automobile parts.

The workshop in Nairobi attracted 55 businesses in Kenya who learned about AfCFTA Trade in Goods Protocol and its critical annexes.

The annexes are Rules of Origin, Tariff Concession and Non-Tariff Barriers) and implications to businesses in the EAC bloc.

The AfCFTA agreement envisages boosting intra-African trade through the gradual elimination of tariffs on over 90 African goods.

Also lined up are the removal of non-tariff barriers and trade restrictions on goods and services, respectively.

The EAC exports of goods to Africa stood at $7.9 billion composing 42 percent share of EAC total exports of goods to the world ($18.7 billion).