Malawi is among 31 African countries earmarked to start trading under the Africa Continental Free Trade Area (AfCFTA)’s guided trade initiative (GTI) this year, the Ministry of Industry and Trade has confirmed.
GTI is a pilot initiative of the AfCFTA which gives room to member states to conduct trade without charging each other customs duties.
Already, about seven countries started trading under the initiative in 2023.
Speaking on Tuesday at the World Economic Forum in Davos and as quoted by Bloomberg, AfCFTA Secretary General Wankele Mane said more than half of the 47 countries that ratified the AfCFTA will use rules of the continental free-trade pact this year.
Apart from the trading instruments, the initiative promotes adoption of cross-border financial market infrastructure enabling payment transactions across Africa.
This will ensure payment and settlement systems using local currencies to address foreign exchange shortages and convertibility limitations.
Launched in October 2022, the facility will be used to test the AfCFTA’s operational, institutional, legal and trade policy environment while it allows meaningful free trade between countries that had met minimum requirements.
The government has said efforts have been deployed on implementing the AfCFTA agreement, including ratifying the agreement and submission of the Goods Market Access Offer in October 2023.
Under the GTI, Malawi will test private sector’s readiness and identify possible future interventions to promote intra-African trade and maximise the benefits of the AfCFTA agreement.
The country has already highlighted key areas of focus for enhancing export trade under the initiative, according to Ministry of Trade and Industry spokesperson Mayeso Msokera.
He projects June 2024 as time when the country could be admitted into the GTI.
“We are just waiting for AfCFTA Secretariate to come to Malawi for readiness assessment which will be sceduled after AfCFTA Council of Ministers meetings where Malawi market access offer will also be considered for adoption,” he said.
The AfCFTA—the continent’s single biggest trading bloc—is among the African Union (AU)’s flagship projects for implementation of its ‘Agenda 2063: The Africa We Want’, and is aimed at bringing together all the 55 member states of the AU in an intra-African continental free trade area.
It would create a market of more than 1.3 billion people and a combined gross domestic product of up to $3.4 trillion.
If fully implemented, the AfCFTA could leverage intra-African trade and increase trade among member states by up to 110 percent.
In addition, the AfCFTA could lift up to 30 million people out of extreme poverty and up to 68 million people out of moderate poverty
