AfCFTA Interview Series - Interview - August 17, 2022

INTERVIEW | “How AfCFTA implementation will benefit from experiences of RECs’ Free Trade Areas” – Dr Ken Ukaoha

Dr Ken Ukaoha, acting director general of the West African Institute for Trade and Agricultural Development (WITAD), speaks on lessons for the African Continental Free Trade Area (AfCFTA), from the implementation of Regional Economic Communities’ Free Trade Areas, particularly the ECOWAS Trade Liberalisation Scheme (ETLS). 

 

Dr Ken Ukaoha, acting director general of the West African Institute for Trade and Agricultural Development (WITAD)

 

Newspage:  As the implementation of the AfCFTA begins, what are the major pitfalls Africa must avoid to make the Agreement a success?

Dr Ukaoha: The continent needs to guard against giving a leeway to third parties i.e those entities that are not within the 55 member states of the African Union to sabotage the Agreement.  We also need to ensure that the AfCFTA is leveraged as an instrument for Africa’s industrialization because this is a matchless opportunity we cannot afford to miss! Again, we need to ensure only our own locally manufactured goods are traded within the AfCFTA market.

Under no circumstances should the AfCFTA be used to promote goods coming from third parties. Thus, we should tactfully negotiate and implement the Agreement’s Rules of Origin by ensuring it only promotes goods originating from Africa. Whatever we failed to achieve through the implementation of the New Partnership for Africa’s Development (NEPAD), we can now achieve through the implementation of the AfCFTA.

 

Newspage: Do you think the AfCFTA is a right step in the direction of achieving the envisioned African Economic Community (AEC)?

Dr Ukaoha: Absolutely! AfCFTA is built on the premise of the Action Plan on Boosting Intra-Africa Trade (BIAT) and Agenda 2063, which is the grand vision for Africa’s development. If properly implemented, the AfCFTA will be a major instrument for the realization of Agenda 2063’s objectives. Now, it is important to understand the interrelationship between the AfCFTA and other continental frameworks such as the Comprehensive African Agricultural Development Programme (CAADP).

To this end, the AfCFTA will not only boost intra-African trade but will also help Africa achieve food security by ensuring that farmers are able to freely move their produce from one part of the continent to another, which will help reduce the huge food import burden which has been a major albatross to Africa’s development. The billions of dollars the continent has been spending on food importation can now be invested in development projects that will help Africa out of the woods.

 

Newspage: The Regional Economic Committees’ (RECs) Free Trade Areas (FTAs) are described as the building blocks of Africa’s integration agenda. What role can FTAs like the ECOWAS Trade Liberalisation Scheme (ETLS) play in the larger AfCFTA agenda?

Dr Ukaoha:  Article 5 of the AfCFTA Agreement describes RECs’ Free Trade Areas as building blocs for the AfCFTA, which is quite commendable. I believe the framers of the Agreement considered the fact that we did not have to reinvent the wheel, hence the need to start from the known (REC’s FTAs) to the unknown (AfCFTA).

I am of the opinion that since we have existing RECs such as ECOWAS, SADC, COMESA and ECCAS, among others, we should study the integration process of the RECs and learn from the level of integration achieved by each of them; the level of economic coordination achieved by them as well as what RECs that are also Customs Unions (CUs) like ECOWAS and SADC have achieved.

Consequently, we should look at what has worked with, for example, the ECOWAS Trade Liberalisation Scheme (ETLS) and what hasn’t worked, which will give us a clear indication as to what we need to do to avoid the mistakes of the ETLS, as we aimed at a hitch-free implementation of the AfCFTA. For instance, it is important to look at why we still have a multiplicity of checkpoints between one country and another within the ECOWAS region and why smuggling thrives more than legitimate trade in West Africa.

We should also examine why trade in illegitimate goods such as small arms and light weapons is still thriving across the region, which translates to heightened insecurity? Also, why has drug peddling become a nuisance within the region? These are some of the issues we need to address under the AfCFTA; as we push for the free movement of goods and services, on the one hand, we need to be conscious of the protection of lives and property, on the other hand.

Further steps are the identification and removal of physical and non-tariff barriers to trade. For example, Benin Republic charges levies on transit goods despite the fact that ECOWAS has a transit protocol which doesn’t provide for any kind of levy on transit goods. The fact that we have not resolved these challenges within ECOWAS means we will still have to deal with them in the context of the AfCFTA.

 

Newspage: The ETLS is one of the oldest REC FTAs in Africa. What lessons can the AfCFTA learn from ETLS despite its failings?

Dr Ukaoha: Although it is still not being fully honored by member states of ECOWAS, I believe the ETLS is a significant achievement whose successes and challenges the AU can learn from in its implementation of the AfCFTA. There are other lessons to be learnt from other RECs such as the East African Community (EAC) region which enjoys a relatively good infrastructure, namely roads and railways network.

Notably, the lack of political will on the part of high-level political actors with regards to the implementation of ETLS is a very important lesson. To make the AfCFTA work, the promoters of the Agreement must therefore galvanize the support of political actors at the highest level. Additionally, there should be a stringent sanction mechanism since it is still the existing customs and border officials in our borders that will implement the AfCFTA.

We also need a very strong Dispute Settlement Mechanism (DSM) to help traders seek redress when there are disputes to settle. I am not comfortable with Article 20 of the AfCFTA Agreement which provides for dispute settlement between state parties; dispute settlement should not be left solely in the hands of member states since it is traders who engage in business – and not member states!

I therefore believe if there are disputes, there should be a mechanism for traders to seek redress without necessarily recourse to their member states. For instance, if a customs officer unilaterally ceases the goods of a trader or intimidated a trader do they wait for their country to engage with the dispute settlement process?

 

Editor’s note: This interview has been edited for length and clarity

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