AfricaBusinessEconomy

AfCFTA: Customs outlines arrangement to liberalise over 90% of tariffs

The AfCFTA is expected to boost Africa’s trading position in the global market by strengthening the continent’s common voice in global trade negotiations

African customs bodies are working towards eliminating a substantial amount of tariffs upon commencement of the African Continental Free Trade Area (AfCFTA), Fechin Akoto, chief revenue officer of the customs technical services bureau within the Customs Division of the Ghana Revenue Authority (GRA) has said.

These initiatives are efforts that the GRA and revenue collection agencies in other African countries within the continental trade agreement are embarking on to ease the tariff burden on goods traded among member countries.

“Seven per cent of the tariff lines fall under sensitive products. That one we would liberalise but not immediately. We shall progressively reduce the tariffs over 13 years,” Akoto said.

“For 90% of goods, we shall immediately remove our tariffs from them. Then the rest, which is 3%, is exclusive,” he said.

He said this while participating in an Eye on Port event on “Understanding the Trade Protocols in the AfCFTA from a Customs Perspective”.

Akoto said member state parties to the AfCFTA have been given ample time to align their laws with the new trade protocols and this will go a long way to enhance customs co-operation.

“Member states have been given some time to make sure that they align their national laws with the AfCFTA agreement. So that, wherever any country will have to encounter contrary provisions against national laws, then you align them.”

Common platform

Akoto said to aid information-sharing, an IT committee has also been set up to facilitate the usage of a common platform for customs services.

“The AfCFTA would use what we call the product-specific rules. These rules cover the whole [health and safety] nomenclature. It means for every product the chapter has a rule, the heading has a rule and then the subject has a rule.

The product-specific rules would have what we call the wholly obtained, non-originating materials and specific processing. Each will form the core rules under the product-specific regime,” he said.

On the scepticism expressed about the rules’ accuracy in determining the origin of traded products, he said all customs have in place mechanisms to enforce the rule of origin.

“As customs, we have to know the features of Kenyan flowers, for example, in comparison to flowers from the Netherlands. We should know fish from our waters and fish not from our waters. We have the training and skills to do so,” he said.

Free zone companies

Akoto said African trade ministers have asked for the establishment of modalities for which free zone companies can trade within the AfCFTA.

“The technical working group is yet to come out with the modalities. Until then, I do not think the free zones will for now trade in the AfCFTA,” he said.

He said unlike ECOWAS, the AfCFTA has in place a conflict resolution system to take care of issues between trading parties. Akoto also said that a directorate from which goods within the continent can be sourced is being prepared to make trading convenient for Africans.

The Afreximbank is developing a special payment system that will allow for payments to be made in the local currency to reduce dependency on foreign currency, with its spillover effects on prices of goods and services.

However, whereas the duty component is free for goods eligible for trade within the African Continental Free Trade Area, other tax components such as levies remain, Akoto said.

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Source
Business & Financial Times
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