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Malawi lags on AfCFTA trading

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Malawi is missing on the list of six countries which will commence trading of goods ahead of other signatories to the African Continental Free Trade Area (AfCFTA).

The six, Ghana, Kenya, Cameroon, Tanzania, Rwanda and Egypt, will be participating in the AfCFTA Guided Trade Initiative.

The AfCFTA secretariat twitted on Monday that the Guided Trade Initiative is one of the key announcements made at the 9th meeting of the AfCFTA Council of Ministers which concluded on Tuesday in Ghana.

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“The idea behind the initiative is to gather countries among the 29 who have submitted their tariff schedules, who have expressed their interest in trading, to initiate trading with the guidance of the Secretariat.

“The key benefits will be to test the environmental, legal and trade policy basis for trade under the AfCFTA, demonstrate that the AfCFTA is functioning, send an important political message to countries that are yet to submit their provisional schedules of tariff concessions in accordance with the agreed modalities and give hope to the continent that trading under the AfCFTA is achievable” the tweet reads.

But Ministry of Trade spokesperson Mayeso Msokera was not sure of actual trading commencing among such countries, saying the major hindrance is negotiations on Rules of Origin (RoO) currently at 87 percent.

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“The preferable level of RoO negotiations to start trading is 90 percent but currently we are at 87 percent so I am not sure if these countries will really commence goods trade. However, it is possible to come up with bilateral agreements.

“The challenge has been that a country may be interested in a particular good that has not been negotiated, for example, Malawi deposited its tariff offer but other countries have not completed their tariff offers so we might be interested in a product which another country is yet to finalise and therefore we cannot commence trading,” Msokera said.

He added: “Unfortunately the products that are remaining are sensitive such as textiles and sugar that are traded in Southern part of Africa. What we are waiting for is another meeting convened by the Secretariat to discuss outstanding issues on RoOs.”

To date, 54 of the 55 African Union Member States have signed the AfCFTA agreement, and over 43 countries, Malawi inclusive, have approved ratification of the Agreement.

The AfCFTA officially entered into force on May 302019, 30 days after deposit of the 22nd instrument of ratification.

Since 2021, Phase 1 of the AfCFTA which is start of trading goods and services came into effect on January 1, 2021, and covering a market of 1.3 billion consumers with a combined gross domestic product of $3.4 trillion.

The AfCFTA is reputed as the largest free trade areas in the world base on the number of participating countries.

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