The Private Enterprises Federation, PEF wants 70 percent of raw materials procured for production under the AfCFTA to be sourced from the Continent.
The Federation makes this demand as the AfCFTA secretariat prepares to put finishing touches to the Rules of Origin guidelines backing the world’s biggest trading pact. There are fears of dumping from companies outside Africa- mostly with the muscle to produce at low cost.
The world’s biggest trade pact seeks to eliminate 97 percent of tariffs on goods and services traded among the 54 member countries in the next decade. Fundamentally, the aim to increase intra African trade from the current 16 percent.
Chief Executive of PEF, Nana Osei Bonsu said the Federation will continue to cure the information failure associated with the 3.4 trillion dollar AFCFTA among the private sector on the continent.
Speaking at a PEF sensitization of private sector players on the AFCFTA, Nana Osei Bonsu said despite the volumes of benefits the agreement presents, information asymmetry, appears to be one of the many challenges, inhibiting the private sector from onboarding.
He intimated that “Africa, we didn’t trade among ourselves because we have the same raw materials and we want our raw materials to be used, so we can create jobs and opportunities. If we don’t create stringent rules of origin.
The component that goes into the product, the majority are not from Africa. They will come from overseas take 5%, 2%, 3% I will get it to maybe 45 or 50% as some of our foreign partners are pushing against. Then leave our raw materials intact that we cannot do much. And because of the raw materials that’s why we pushed to get the Intercontinental free trade. So we have to take advantage.”
A key component of the agreement is the rules of Origin. This set of rules spell out what product or service can be described African and fit to be traded under the trade deal. Six months after the implementation of the AFCFTA, the secretariat is at the final stages of drafting the rules.
Transportation, payment systems, fragmented regulatory regimes, high cost of production and the lack of funding for micro-businesses are other bottlenecks that must be dealt with for the AfCFTA to make the desired impact.
Story By: Mabel Adorkor Annang